UK’S £10m project to unleash Malawi’s export potential
The United Kingdom (UK) has launched a £10million project, the Malawi Value Chain (MVC), which is to run from 2023 to 2028 aimed at encouraging foreign and domestic investment and increase the value of Malawi’s exports — especially in high value export sectors.
A statement from the British High Commission in Lilongwe says the MVC will focus on three value chains — macadamia, mango and mining.
The UK believes MVC will contribute greatly to increasing Malawi’s narrow export base, thereby increasing the supply of foreign exchange and creating strong jobs and revenue in the country.
The project aligns well with MW2063’s First 10-year Implementation Plan (MIP-1), which among other things focuses on agricultural diversification and promotion of exports.
The statement quotes Deputy Chief Economist in the Foreign, Commonwealth and Development Office (FCDO), Nick Lea as saying: “UK believes passionately in Malawi’s economic prospects.
“Developing new high-value agricultural exports, and building an industrial base around these, is key to Malawi’s prosperity and the creation of jobs across multiple sectors of the economy to benefit from Malawi’s considerable agricultural potential and hard-working labour force.
“Today’s launch of the Malawi Value Chain programme will work flexibly on the issues holding back industrial transformation in the selected high value export sectors — macadamia, mangoes and mining — while adapting to the needs identified by the private sector players who must drive this growth.”
Gracing the occasion on Tuesday was Minister Trade & Industry, Sosten Gwengwe, who said through Export Strategy II, the Malawi government is committed to private growth buying removing barriers faced by the industry.
He added that the government was committed to expanding value chains in agriculture, tourism and mining.
The launch follows the completion of a 6-month inception phase of the project where scoping and needs assessments were carried out to identify the gaps and the value chains for the programme to focus on.
Specifically, the MVC will expand commercial off-taker models in high value export sectors; improve access to productivity enhancing techniques and invest in management capacity.
A component of the UK’s £39m Malawi Trade & Investment Programme (MTIP), the MVC is also expected to pilot new business approaches as well as improve supply chain management and standards.
The MTIP aims at stimulating a step change in Malawi’s growth by promoting higher value exports, cutting time and cost to trade and promoting international and domestic investments.
MTIP is executing this project — which is being implemented by Adam Smith International and Kadale Consultants — by addressing key market failures, constraints, and barriers to trade around policy, tariffs and infrastructure.
In June, when the UK introduced a new post Brexit trading scheme for least developed countries (LDCs), the Malawi High Commission emphasized that it would benefit Malawians to grow in trade and business.
The British High Commission spokesperson, Benson Linje told the media then that individuals who do different businesses in the country would be able to export various products to the UK on a duty free basis.
“We have been crying for trade not aid in Malawi,” he to Malawi News Agency MANA in June. “So the new scheme will help business Malawians to grow and trade in the UK. This opportunity has come at a right time and Malawians will be able to export goods to the UK without paying tariffs.”
While nodding to Linje’s observation, macroeconomic expert at University of Malawi, Innocent Makuta told MANA that Malawi could take advantage of the new post Brexit trading scheme only if Government could enact deliberate measures to support companies and individuals who may wish to venture into this arrangement.
“Government must deliberately put in place measures to support companies and individuals that wish to export goods under this arrangement,” Makuta was quoted as saying.
“This may include helping with identification of markets, targeted subsidies for such exports, and provision of assistance on administrative requirements for such trades.”
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