Maputo — Mozambican Foreign Minister Jose Pacheco declared on Monday that Mozambique remains interested in selling electricity to Malawi.
Speaking to reporters after a meeting in Maputo with his Malawian counterpart, Emmanuel Fabiano, Pacheco said that, in an initial phase, Mozambique could sell 10 megawatts of power to Malawi from Mandimba, in the northern province of Niassa.
But to make this interconnection possible, Malawi will need to provide investment of 300,000 US dollars.
Pacheco added that coal fired power stations in Tete province could provide power to both Malawi and Zambia. However, no such power stations yet exist, although the coal mining companies have promised to build them.
“By 2020, our capacity to generate electricity will increase”, said Pacheco. With greater availability of Mozambican power, he promised further agreements between Mozambique and other countries of the region.
A further challenge, Pacheco added, was the Sena railway line. Currently this runs from the Moatize coal basin in Tete to the port of Beira. But there is a spur into southern Malawi that has not been used for many years, and Pacheco hoped that Malawi can benefit from re-opening this stretch of track.
“We shared information about projects to build other rail and port facilities, such as the Port of Macuse”, said Pacheco. This is the plan for a new deep-water port at Macuse, on the coast of Zambezia province. Macuse could be another option for Malawian trade: the new port will be considerably nearer to southern Malawi than either Beira or Nacala.
Fabiano said he had come to Maputo “specifically to discuss matters concerning energy. We are neighbours and, from time to time, we discuss matters of common interest”. One of those interests was to ensure that the countries of southern Africa can share electricity.
Malawi is desperately short of electricity, and even those parts of the country fortunate enough to be connected to the national grid often face lengthy power cuts. The vast bulk of Malawi's electricity supply comes from hydro-power stations on the Shire river, which can generate less than 300 megawatts.
Fabiano also visited the combined cycle gas-fired power station in Maputo, which is the fourth gas-fired power station built for the Mozambican electricity company EDM. The company plans to build two more in Temane, in the southern province of Inhambane, where the gas is extracted and process by the South African petro-chemical giant Sasol.
The EDM director of generation, Narendra Gulab, said that, although there is currently no direct connection between the Mozambican and Malawian electricity grids, EDM has a project for interconnection that is “well advanced”.
“In the near future, we shall have great potential in energy”, said Gulab. Mozambique will be a major source for generating electricity, “and we shall also be able to supply Malawi”.
Maputo — The government of Angonia district, in the western Mozambican province of Tete, has just banned the use of foreign currency - notably the Malawian kwacha - in the sale of Mozambican goods.
The district administrator, Paulo Sebastiao, speaking to reporters on Saturday, confirmed the ban on the use of the kwacha.
“We took this measure to safeguard the interests of the producers, who work on the fields, and in return receive kwachas, which are of low value, when compared with our own currency, the metical”, he said.
Sebastiao said that the Malawian buyers enter Mozambique, particularly Angonia, to purchase agricultural products. “They entice our peasants with many kwacha notes which are worthless in comparison with our metical”, he added, “and, because of their lack of knowledge, our producers end up receiving the foreign currency. We are reversing this situation because it is damaging our fellow citizens”.
He said the district government is training inspectors who have the task of raising awareness among producers near the border so that they know how to sell their produce (such as maize, beans and potatoes) for a proper price.
Trade in kwachas along the border has been going on for decades and is unlikely to stop just because of a government dictate. The border is highly porous, and if the district government inspectors make life difficult for farmers inside Mozambique, there is nothing to stop them simply walking over the border and selling their produce inside Malawi.
As for the supposed worthlessness of the kwacha, at Monday's exchange rates, published by the Bank of Mozambique, there are about 86 meticais to the kwacha.
The leaders of 44 African countries have signed a deal to create one of the world's largest free trade blocs. The agreement was signed at a summit in the Rwandan capital, Kigali.

It is hoped the deal will come into force within six months and increase prosperity for 1.2 billion Africans.

But 10 countries, including Nigeria, have refused to sign the deal, and it will need to be ratified by all the signatories' national parliaments before the bloc becomes a reality.

The African Continental Free Trade Area (CFTA) would remove barriers to trade, like tariffs and import quotas, allowing the free flow of goods and services between its members.

In theory that should boost commerce, growth and employment. The United Nations Conference on Trade and Development also predicts that reducing intra-African tariffs—one of the conditions of AfCFTA— “could bring $3.6 billion in welfare gains to the continent through a boost in production and cheaper goods.” If fully adopted, the United Nations Economic Commission for Africa says intra-African trade can increase by 52% by 2022 when compared to 2010 trade levels. That represents major growth as the current reality is stark with intra-African trade making up only 16% of total trade on the continent in 2014.

African Union commission head Moussa Faki Mahamat called it a "glorious challenge... which calls for the courage to believe, the courage to dare... the courage to achieve".

He then recognized that to succeed the countries will "need to summon the required political will".

Even though 44 countries signed up for AfCFTA, the agreement will have to be ratified by national parliaments of signatory countries after which the free trade area will come into effect. Before then though, there’s a lot of work to be done as a free trade area across Africa will likely be held back by current logistical pitfalls.

Trade between African countries is relatively low. It accounts for only 10% of all commerce on the continent - compared with 25% in south-east Asia - according to news agency Reuters.

Once the free trade area is established, the ambition is to take further steps that echo the creation of the European Union - like a customs union, a common market, and even a single currency. There are many obstacles still have to be overcome.

One is the relatively low level of manufacturing that takes place on a continent where trade often means selling raw materials to the outside world.

Another is getting Africa's largest economy, Nigeria, on board. President Muhammadu Buhari pulled out of the summit, after "certain key stakeholders" - thought to mean trade unions and businesses - complained they had not been consulted.

The African Union said it hoped those countries with reservations would be persuaded to sign at a later date.

Malawi’s Minister of Foreign Affairs Emmanuel Fabiano was on hand to sign on behalf of The President.
The African Export-Import Bank (Afreximbank) will disburse about $25 billion in support of intra-African trade for five years ending in 2021 under an Intra-African Trade Strategy, which it launched in 2016 in anticipation of the African Continental Free Trade Area (AfCFTA).

Afreximbank President, Dr. Benedict Oramah, announced in Kigali, Rwanda at a special luncheon for heads of states and delegates attending the signing of the agreement for the launch of the AfCFTA that the Strategy drew inspiration from the African Union's Action Plan for Boosting Intra-African Trade and the Action Plan for Accelerated Industrial Development in Africa.

It sought to contribute to providing end-to-end and comprehensive solutions to smoothen the conduct of cross-border trade and investment activities across Africa, he said.

The Bank, in a statement quoted Oramah as saying that the signing of the AfCFTA agreement promised to build a solid foundation for prosperity for all Africans, adding that "Afreximbank is, therefore, prepared, willing and able to play its role to make sure that opportunities created by the history-making step taken by African leaders are fully realized".

He announced that, as part of the Intra-African trade Strategy, Afreximbank had opened credit lines amounting to $800 million to 55 banks across Africa in order to facilitate the confirmation of letters of credit in support of intra-African trade.

The Bank's goal was to extend such lines to at least 500 banks in all African countries by 2021 in order to significantly reduce the cost of intra-African trade finance and to counter the constraints posed by country risks.

Oramah added that the inaugural Intra-African Trade Fair, which the Bank was organizing in collaboration with the African Union in Cairo between December 11 and 17 would attract more than 1,000 exhibitors and bring in some 70,000 visitors.
There has been a drastic fall in prices of the pigeon pea crop since India which is the main importer, restricted import of the legumes from Tanzania in August 2018. Local banks which provided loans to farmers, are struggling to get the lenders to pay back their debt.

Tanzania's Sh537 billion ($240 million) pigeon pea industry is on a sharp nosedive after India banned import of the legumes from Tanzania in August last year.

The unanticipated restriction is now wreaking havoc on hundreds of pigeon pea farmers and traders across the country who are holding hundreds of tonnes of the legume for lack of market.

Reports have attributed the restriction to over-production of the legumes in India in the last two years. The price of pigeon pea which remained stable at between Sh1,500 and Sh4,000 in the last four seasons has drastically dropped to Sh200 as the result.

India's ministry of Commerce and Industry issued a Trade Notice No 13 (2015-2020) restricting imports of the commodity from countries with no bilateral agreement on the crop with the South Asian nation.

The Indian notice caught farmers and traders unprepared as it came at the peak season for the crop, meaning farmers are currently facing significant losses from their investments and the government is now losing a lot in export revenue.

Local authorities in regions known for large scale cultivation of the crop are blaming sharp fall of revenue on the import restriction.

The move is also reported to have put local banks which have provided loans to pigeon pea farmers in difficult time as the lenders fail to furnish their debts.

The Ministry of Agriculture estimates that about 300,000 households are involved in pigeon pea farming.

The heavily criticized ban came despite the Memorandum of Understanding (MoU) signed by the two countries in 2000 under which Tanzania would grow the grains for the Indian market. India is the main export destination for Tanzania pigeon peas and other pulses.

Renewed negotiations between the two governments since then to have the biting ban revoked have borne no fruit to date, heightening growing fears to the farmers where pigeon pea is a leading cash crop.

That is also despite the support of the Geneva-based International Trade Centre (ITC), a multilateral agency with the joint mandate with the World Trade Organisation, to promote exports from the developing countries.

Also involved in talks to rescue the situation are the newly-formed Tanzania Pulses Network (TPN) based in Dar es Salaam and the East African Grains Council (EAGC), a regional body based in Nairobi.

Tanzania's pigeon pea exports to India ranged from 160,000 to 180,000 tonnes annually out of an estimated 200,000 tonnes yearly production.

That accounted for 97 per cent of the exports. The remainder is sold to the Middle East, Kenya, Eastern Europe, and North America.

In India and other Asian countries, the grain is a common good consumed on large scale and is a major source of protein for the population.
The ban also covered green gramme and chick peas with annual production estimated at 100,000 and 80,000 tonnes respectively. Most of them are also traditionally exported to India.

Tanzania is ranked tenth in the global production of pigeon peas and second in Africa. India doubles as the main producer and importer, followed by Myanmar, Mozambique, Malawi, South Sudan, Canada, Ukraine and Russia.

Other countries producing the crop include Kenya and Uganda. It is estimated about 100,000 hectares are under cultivation of the drought-resistant legume across the country, with Babati being the leading district.

During his visit to Tanzania in 2016, Indian Prime Minister Narendra Modi promised his country would increase its imports from Tanzania to one million tonnes annually for all pulses, including pigeon peas.

A year later the import ban was imposed shutting out Tanzania. Nonetheless, countries such as Mozambique and Malawi continued to enjoy the South Asia country's huge market of legumes buyers.

Among those hit hardest, are the farmers in Babati, Manyara, Tunduru, Mtwara, Nanyumbu, Masasi, Newala and Kondoa districts, where pigeon peas has been the leading cash crop for several years now.

Local traders have since last August been buying the beans at Sh200 per kilo from between Sh1,600 and Sh4, 000 in 2016.