Malawi Launches New National Trade and Industrial Policies

Nov 11, 2016

A trader in Nessa GVH, TA Mabuka in Mulanje. Mulanje

The Government of Malawi on the 7th of October launched the National Industrial Policy and the National Trade Policy with an aim to support the private sector in furthering economic development, generating employment and reducing poverty. The development and launch of the two policies have been supported by United Nations Development Programme (UNDP).

Presiding the launch of the two policies in Lilongwe, the Minister of Industry, Trade and Tourism, Honourable Joseph Mwanamvekha emphasized the timeliness and relevance of the two policies. He noted that there is a clear need for significant industrial development if the country is to achieve high economic growth and poverty reduction on a meaningful scale.

“We shall witness our country transforming from a predominantly importing and consuming country to one that predominantly produces and exports,” said Honourable Mwanamvekha, adding that the aim of the National Industrial Policy (NIP) is to enhance the country’s productive capacity through industrialization.

On the Trade Policy the Minister said that the policy reflects a range of opportunities and challenges facing Malawi as the country tries to use trade as a tool for sustainable economic growth and poverty reduction.

UNDP Resident Representative in Malawi, Ms. Mia Seppo, commended the Ministry of Trade, Industry and Tourism for its leadership in the development of the two important policies.

“This is a critical milestone that complements other important efforts recently undertaken by the Government aimed at the advancement of the industrialization agenda of this country,” said Ms. Seppo, recognizing the work in the development of the Buy Malawi Strategy (BMS), National Quality Policy, and Micro, Small, Medium-size Enterprise (MSME) Policy as efforts by the Ministry to advance Malawi’s industrialization agenda.

“Entrepreneurs and business leaders are at the heart of these policies, and I am very confident the business community will keep engaging and will support the key actions underpinning the ambitious implementation plans of the two policies,” she said, adding that there is need to create spaces in which private and public actors can come together to solve problems while sharing experiences.

She said the launch of National Trade Policy and National Industrial Policy resonate well with the ninth Sustainable Development Goal (SDG), which aims to “Build resilient infrastructure, promote sustainable industrialization and foster innovation”.

The National Industrial Policy has been developed in recognition that industrialization and structural transformation of the economy are essential to maintain a rapid long term economic growth that is needed to raise per capita income, create sufficient rural and urban jobs, widen tax base to finance Malawi’s welfare requirements and address an unsustainable trade deficit.

The National Industrial Policy addresses issues such as appropriate skills and technology; improved business environment for the manufacturing sector; improved access to key business services; support to the manufacturing sector and increased participation of the Macro, Small and Medium Enterprises (MSMEs).

The National Trade Policy, on the other hand, seeks to make Malawi a globally competitive export-oriented economy, generating higher and sustainable livelihoods through trade. It provides guidance in dealing with factors that determine the growth of the economy such as land, taxes, productive labour force, energy supply, raw materials, transport costs, and education standards.

According to the Ministry of Trade, Industry and Tourism, since 1970s, Malawi’s economy has not adequately transformed and industrialized. Malawi’s economy has largely remained agricultural, with agriculture representing on average 33% of GDP. The share of manufacturing in GDP is reported to have steadily declined from a peak of 20% in 1992 to only around 11% in 2011.