Malawi bans foreigners to trade in rural areas: Chinese affected with new law

May 11, 2015 Nyasa Times Reporter 17 Comments

Malawi has new business licensing law which would prevent foreign traders from working in rural areas as of July 1.

A Chinese merchant talks to customers in his shop in Salima, a dusty town of 40,000 people near the shores of Lake Malawi, in this picture taken July 31, 2012. REUTERS/Ed Cropley
A Chinese merchant talks to customers in his shop in Malawi. REUTERS/Ed Cropley
A Malawian hawker sells food outside a Chinese owned shop in Salima, a dusty town of 40,000 people near the shores of Lake Malawi, August 21, 2012. REUTERS/Ed Cropley
A Malawian hawker sells food outside a Chinese owned shop in Salima, a dusty town of 40,000 people near the shores of Lake Malawi,. REUTERS/Ed Cropley

The law says foreigners can only do retail business in designated urban areas, such as Blantyre, Zomba, and Lilongwe.

It adds that foreign traders need to obtain a license from the Chief Business Licensing Officer as well as the Investment Approval Committee.

“A person, who is not a citizen of Malawi, and intends to carry out business whose core activity is retail, shall operate in main cities and municipalities within the areas designated for that purpose,” Cliff Chiunda, the chief business licensing officer and a secretary of the Ministry of Industry and Trade, said.

Chinese traders who operate retail shops and restaurants in rural areas are expected to be most affected by the new law.

Malawian traders can’t fairly compete against Chinese retail traders whose goods are relatively cheap.

Others  in support of the Chinese traders argue that the foreigners offer lower prices than those offered by the local traders.

The new law is part of reforms introduced to Malawi’s economic legislation with the aim of implementing the country’s Growth and Development strategy II which focuses on empowering Malawi’s citizens.

A foreign trader has to pay $250,000 in fees to start a business in the light of the new law.

The licensing fees will help Malawi attract investors who can meaningfully contribute to the development of the country, Newton Kambala, the president of Malawi’s Confederation of Commerce Chambers, said.

 

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