Unlocking Malawi for Trade: "Harnessing the Potential of AfCFTA for Business Growth and Economic Development"

#afcfta #intraafricantrade #african

Last year I was invited to a two-day workshop facilitated by GIZ in conjunction with Malawi Confederation of Chambers of Commerce and Industry (MCCCI). The workshop was about the African Continental Free Trade Area (AfCFTA) in relation to Rules of Origin. There is much hype on the continent with the one Africa market with 1.2 billion potential customers promising to be the dream Africa has been waiting for. However, this is all good on the paper but the practicality of it relies heavily on hard and soft infrastructures that are conducive enough to create an enabling and sustainable environment. Switching to the local scene, we have a robust Malawi 2063 Agenda which promises the agricultural industrialization in creating a self-reliant nation. The question also remains whether as a country we are ready to face the competition from one Africa, with products, infrastructure and markets that are favorable and fit for the intra continental trade?

The AfCFTA presents significant opportunities for local enterprises in Malawi to expand their reach, access new markets, and stimulate the much needed economic growth. One renowned expression says failing to plan is planning to fail. Malawian businesses need to appreciate the goals, principles, and provisions of the AfCFTA agreement and prepare well enough to benefit from this. Furthermore, they need to understand the potential challenges that the agreement may presentfor the industry in Malawi and be well prepared to counter them. In this feature, I share some of the steps which can be helpful to the business community.

1.????Conduct Market Research: Enterprises need to identify target markets within Africa that align with their products or services. In this regard, the market research will enable them to understand the demand, competition, regulatory environment, and consumer preferences in those foreign markets. There is enough data on different websites which have been formulated in line with boosting the intracontinental trade agenda.

2.????Enhance Product Quality and Standards: Ensure that your products or services meet international quality standards and comply with applicable international regulations. This will ensure that their products are competitive in both local and regional markets. The newly inaugurated complex under Malawi Bureau of Standards (MBS) should be fully utilized as it is vital in ensuring there is no technical gap in the drive for industrialization.

3.????Strengthen Supply Chains: Review and optimize your supply chain to ensure efficiency, reliability, and cost-effectiveness. Explore partnerships with suppliers, logistics providers, and distributors within the AfCFTA framework to streamline operations and improve market access

4.????Explore Trade Agreements: Understand the trade agreements and protocols associated with the AfCFTA, such as Rules of Origin, Non-Tariff Barriers, and Trade Facilitation. Business needs to align their practices accordingly to benefit from preferential tariffs and market access.

5.????Seek Strategic Partnerships: Collaborate with local and regional businesses to leverage synergies, share resources, and expand market reach. Strategic partnerships can help overcome barriers to entry and navigate the complexities of new markets.It is high time we started in more structured associations to take advantage of economies of scale. There was a workshop in 2022 with Afreximbank and Export Development Fund (EDF) last time on creation of Export Trading Corporations. The Government sector is critical in these arrangements as they are key to fostering enabling sustainable business environment.

6.????Invest in Infrastructure and Technology: Upgrade your infrastructure and invest in technology to enhance productivity, efficiency, and competitiveness. This includes improving transportation networks, adopting digital platforms for e-commerce, and implementing effective data management systems. In the first part, the signing of the Millennium Challenge Compact last year has brought some sigh of relief among the different stakeholder, we need to take advantage of such if we are to be seen as market of interest in the intra Africa trade. The academic research institutions such Malawi University of Business and Applied Sciences (MUBAS) and Malawi University of Science and Technology (MUST) should be fully utilized. Recently, we have seen different interesting innovations, which need patenting to ensure that this culture is encouraged.

7.????Promote Cross-Border Trade Finance: Facilitate access to finance for cross-border trade by collaborating with financial institutions and exploring trade finance instruments such as letters of credit, export credit insurance, and factoring. Access to finance is listed as one of the challenging factors in promoting business in Malawi. Financial Institutions need to engage with businesses to see how we can come up with strategies to aid businesses in this regard. We have a few of them which have footings outside Malawi, therefore they can leverage on existing networks.

8.????Develop Export Marketing Strategies: Even though we are one Africa, businesses need to understand foreign markets in terms of culture. They need to tailor marketing and branding strategies to target specific African markets. Understand cultural nuances, consumer preferences, and local marketing channels to effectively position your products or services. Communication which is seen as positive message can literally be interpreted as a taboo just across the border.

9.????Continuous Learning and Adaptation: Stay updated on the latest developments, regulations, and opportunities within the AfCFTA. Continuously assess and adapt your business strategies to capitalize on emerging trends and market dynamics. All those in charge of business must be willing to upgrade their knowledge, attend courses and join AfCFTA group related platforms.

10. Engage with Trade Support Institutions: Seek support from relevant trade support institutions, industry associations, and government bodies that can provide guidance, market intelligence, and assistance in navigating the AfCFTA framework. The Malawi Investment Trade Centre is pivotal in this regard.

By adopting some of these strategies, Malawian businesses can position themselves effectively within the AfCFTA and seize the opportunities presented by the largest free trade area in the world.