Officials from the Malawi Investment and Trade Centre (MITC) have come out in the open to concede that Malawi is failing to sustain export deals.
This comes hot on the heels reports from the ministry of Trade and Industry that the country is failing to sustain export deals for produce in South Sudan and India where there is great demand for pigeon peas.
MITC chief executive officer Paul Kwengwere says the unsustainability of export deals the country gets is one of the factors that is affecting the trade sector in the country.
He has since asked Malawians to produce more if the country is to export more.
Kwengwere said this at a sensitization workshop of the 2023 Intra African Trade Fair scheduled for 9 to 15 November in Egypt, where over 30 Malawian companies are expected to take part.
Meanwhile, principal secretary in the ministry of Trade and Industry Christina Zakeyu said the mega farms Initiative will ensure the country sustains its deals.
She also disclosed that following the country's participation at the China-African Economic and Trade (CAET) in July this year, eleven Malawian companies have been accredited by China to be exporting their produce such as soya and tea to the country.
Source: Nyasatimes
Salima sugar company has disclosed that it plans to expand its factory and estate as part of its new established reforms.
Speaking during a tour by the KwaZulu Natal Parliamentary committee on agriculture and rural development, Board chairperson for the company Webster Kossamu disclose that the company will soon start the production of its own ethanol.
"Currently the company is not making profits as it has huge debts as of now, the company was established with a load from the Indian government which the government of Malawi is still paying as such the government is not benefiting," he explained.
According to Kossamu the reforms that have been established are to address some of the challenges that the company is currently facing.
"We would like to expand our factory and estate so that we will be able to grow more sugarcane for a large-scale sugar production and soon we will be producing our own Ethanol which will help in forex generation," he further highlighted.
Meanwhile while appreciating the new reforms, Chairperson for the committee Ntombikayise Sibhidla said there's need for their committee and the country's committee on agriculture to have a meeting on how best they manage state owned factories.
"Back in South Africa we are also passionate about sugar production, I believe if the reforms that are being proposed are put to action, the company will soon be of great benefit to the country's economy," she highlighted.
according to Sibhidla some of the challenges that the company is facing are the same as state owned companies in South Africa are facing and the two countries can work together to find solutions.
Currently Salima sugar manages to produce 21 thousand tons of Sugar annually.
Dar es Salaam, Tanzania — Tanzanian President Samia Suluhu Hassan has called for the removal of trade barriers on the East African nation's border with Malawi to boost trade between the two countries, the presidency said late Friday.
A statement by the Directorate of Presidential Communications said Hassan made the call at the end of her three-day state visit to Malawi on Friday. "People between the two countries should do business along the border without barriers," said Hassan.
The statement, signed by Zuhura Yunus, director of Presidential Communications, said Hassan and Malawian President Lazarus Chakwera tasked ministers responsible for trade to work out the elimination of existing trade barriers.
The statement said Hassan commended Malawi for starting to teach the Kiswahili language in schools, saying the language stood a better chance of uniting Africa.
According to the statement, during her visit, Hassan witnessed the signing of agreements on information and communications technology between the two countries.
Source: allAfrica.com
African currencies have lost ground against the US dollar this year, further driving inflation in the import-reliant region. Depleting dollar reserves have left policymakers with limited options to arrest the decline.
Sub-Saharan African currencies are on a downward spiral against the US dollar this year, spelling trouble for citizens and businesses alike.
"We are unable to buy the same amount of goods we used to buy, our capital and trade volumes have drastically fallen pushing our businesses towards bankruptcy," said Joseph Obeng, president of the Ghana Union of Traders Association (GUTA).
Interest rate hikes in the US — which is driving away investors in pursuit of higher returns toward US assets — and weak demand for African exports amid global recession worries have been dragging down African currencies.
Local citizens are decrying higher prices of imported goods leading to high costs of living while importers are complaining about their inability to source enough goods due to the decline in the value of their local currencies.
When currencies weaken against the greenback, imports become expensive as they are mostly denominated in US dollars.
"We are unable to make profits since our customers no longer have the purchasing power to patronize our businesses," Obeng said.
Although the question is simple, there are no easy answers. A mix of both internal and external issues has been behind the continuous decline in African currencies. Most African economies have been unable to recover fully from the economic disruptions caused by the COVID-19 pandemic.
"Basically, a stronger dollar can lead to capital outflows as investors seek to get better risk-adjusted returns on their investments and they would get that back in the US. As capital flows out of a country, local interest rates will rise and that's just to maintain parity," Stephen Akpakwu, head of sovereign advisory at Crossboundary Africa, told DW.
Many Sub-Saharan countries depend on a narrow range of commodities for foreign exchange. This means that when global demand for those goods falls, the value of their currencies drops too due to a drop in foreign income.
The global economic slowdown due to the Russian war in Ukraine has resulted in lower demand for African exports, thereby hurting foreign exchange earnings and pulling down local currencies. The war has also partly driven up import costs for food and fuel, further depleting the foreign exchange reserves in the region.
Fiscal deficits — the shortfall in a government's total income compared with its expenditure — have also been partly blamed for causing higher demand for dollars. About half of the countries in Sub-Saharan Africa had deficits exceeding 5% of gross domestic product last year, putting pressure on their exchange rates, the International Monetary Fund said.
The Nigerian naira is the biggest loser, falling more than 70% against the dollar this year, primarily after Nigeria's central bank removed trading restrictions on the official currency market.
With more than two-thirds of imports in most Sub-Saharan African countries priced in dollars, the region is highly sensitive to a strengthening dollar.
"A 1 percentage point increase in the rate of depreciation against the US dollar leads, on average, to an increase in inflation of 0.22 percentage points within the first year in the region," the IMF said in a blog in May. "There is also evidence that inflationary pressures do not come down quickly when local currencies strengthen against the US dollar."
With 60% of external debt in US dollars in Sub-Saharan African countries, declining currencies are making it more costly to service those loans.
''You have a real issue with debt. So, your external debts in terms of the nominal service cost will go up if your local currency depreciates. It would actually cost you a lot more to service the debts that you currently have," Akpakwu said.
Different governments have taken different measures to prop up their currencies. Some governments have resorted to implementing tighter monetary policies, including hiking interest rates. Many central banks have also tried to boost their currencies by pumping in dollars from their reserves in the local foreign exchange market, but with their reserves depleting fast, they are left with limited options.
In Kenya, the government is aiming to collect more revenue by raising taxes to address budget deficits and cut down on borrowings in dollars.
In Nigeria, President Bola Tinubu announced an end to the country's multiple exchange rate system which was used to artificially keep the naira strong. As a result, in June, the central bank lifted trading restrictions on the official market, driving down the naira to a record low.
Ethiopia has opted for more stringent measures such as imposing bans on foreign currency transactions by local businesses.
Akpakwu says governments can still do more by prioritizing local currency financing to insulate themselves against exposure to increased exchange rates. He further adds that governments must diversify their manufacturing abilities to avoid an overreliance on commodity exports by introducing industrial policies that drive growth in different sectors.
Source: dw.com/Africa
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