Chapter 4: Leading Sectors for U.S. Export and Investment
Recent sales suggest that there is a growing demand for solar products, particularly products adapted to allow users in remote areas to operate equipment.
The Government of Malawi legalized the importation of used clothing in 1994. Given most people's limited purchasing power, used clothing is in great demand.
Used equipment and vehicles -- particularly heavy trucks -- are in demand. Used farm tractors are also in demand, and are sometimes sourced directly from the U.S.
Computers and Computer Peripherals
U.S. products constitute about half of the growing Malawi market for computers and computer peripherals. In July 2000, Malawi eliminated import duties on computers, uninterrupted power supply (UPS) units, and computer printers.
Donor support for Malawi has created opportunities for U.S. businesses to supply materials, equipment, and expertise for donor-financed projects in various areas. The U.S. Agency for International Development (USAID), the World Bank, and the African Development Bank/Fund are the major donors for projects for which U.S. firms are eligible. There is a particular opportunity in providing medical supplies and equipment.
The Government of Malawi is upgrading its telecommunications systems and infrastructure. Some U.S. firms have already entered this sector, but opportunities for other firms still exist. Malawi's second GSM cellular telephone network -- "Celtel Malawi" operated by Mobil Systems International (MSI) of Britain -- began operations in Blantyre in July 1999. MSI has since expanded service to many parts of the country and has now become the largest cellular service provider. In December 2002 the government granted a third national cellular license to Malawi Mobile Networks Limited, a consortium of local and foreign companies. The license has since been cancelled because of the operator's failure to establish a network.
The Malawi Government established the Malawi Communication Regulatory Authority (MACRA) in May 1999 (as a regulatory body) and split the former Malawi Posts and Telecommunication Corporation (MPTC) into the Malawi Posts Corporation (MPC) and the Malawi Telecommunications Limited (MTL) in May 2000. The Malawi Government has now sold MTL, but has retained public ownership of MPC.
The road sector generally provides significant opportunities for investors who form joint ventures with local contractors. Although traffic volume may not be adequate, the Government is presently investigating the feasibility of introducing toll roads in Malawi on a build-operate-transfer basis.
Agriculture is the sector in which Malawi competes most successfully in international markets. Tobacco, tea, sugar and coffee are Malawi's most important cash crops, but exporters have registered growing success with groundnuts, macadamia nuts, paprika, and chilies. Given the uncertain long-term outlook for tobacco sales, agricultural diversification is important for Malawi. U.S. goods or technical knowledge that could be adapted in a cost-effective manner to Malawi's agricultural conditions and boost the quality, quantity, or diversity of crops might find a profitable market.
Chapter 5: Trade Regulations and Starndards
Domestic protection through tariffs is gradually diminishing as the government continues to shift sources of revenue collection from customs duties to consumption and direct taxes. Import duties vary according to product and country of origin. As a member of The Southern African Development Community (SADC) and the Common Market For Eastern And Southern Africa (COMESA), Malawi grants reciprocal preferences to member states of these organizations. Malawi has bilateral trade agreements with South Africa, Mozambique, and Zimbabwe, which allow duty-free entrance of Malawian products; however the Zimbabwe / Malawi bilateral trade agreement is undergoing negotiations to solve problems related to currency exchange, the poultry industry, and other issues. In June 2000 the Government reduced tariff rates on intermediate goods and raw materials from 15 to 10%, but extended a 20% surtax to commercial transport fees. COMESA members eliminated duties for member-states in October 2000. Implementation of a SADC Free Trade Area took effect on January 1, 2001 when member states started a phased tariff-reduction program.
The Government of Malawi is working to reduce and/or eliminate various tariff and non-tariff barriers. Malawi operates a liberal import and export-licensing system with restrictions largely based on health, safety and national security reasons. All Current Account transactions are fully liberalized. Since May 2000, Malawi has maintained a managed-float exchange rate system, which the Reserve Bank of Malawi (RBM) regulates through an auction system. As a practical matter, foreign currency is often not available, owing to the RBM's tight foreign exchange policy. Capital Account transactions are still controlled.
According to customs regulations, the following documents can be demanded by customs officials:
Transport by Road Vehicle: A complete list of the goods carried; copies of all waybills; and copies of consignment notes.
Import Requirements and Documentations
Transport by Aircraft: Manifests of the cargo signed by an authorized person at the point of departure; lists of the passengers and crew; lists of any goods on board which are accompanying passengers (i.e., baggage); the clearance, if any, from the last foreign port; and the aircraft's journey log book.
Transport by Train: Copies of invoices, waybills, delivery and advice notes, and other documents for goods which will be entered at that port; lists of all goods carried on the train other than the cargo.
A "Clean Report of Findings" from the ITS affiliate in the exporting country.
Under Malawi law, the Controller of Customs and Excise is authorized to allow the temporary importation of goods. The Controller may impose conditions on temporary importation -- such as mandatory re-export -- and may allow entry "for such period as he thinks fit" and "for such purposes as he may approve." Temporary entry is customarily authorized when goods are in transit to other countries, or when goods are accompanying tourists.