The fourth Trade Policy Review of Malawi has provided us with a good opportunity to understand better the recent developments in its socio-economic, trade and investment policies since its last Review in 2016, as well as the challenges Malawi is facing.
I would like to start by thanking Minister Sosten Gwengwe, Minister of Trade and Industry, Ambassador Caroline Bwanali Mussa, and the rest of the Malawian delegation for their constructive engagement in this meeting. I would also like to thank Ambassador Nadia Theodore of Canada, for her insightful interventions as the discussant. The Review was based on reports by the WTO Secretariat and Malawi, both of which were appreciated by delegates.
Malawi is an LDC with a fast-growing population, relying heavily on agriculture, which accounts for 24% of its GDP and 90% of its total merchandise exports. The economy faces many challenges, including alleviating poverty, diversifying exports, and reducing vulnerability to external shocks such as natural disasters and global commodity price increases. Over the review period, its real GDP growth rate fell from an annual average of 4% pre-COVID (2016-19) to a yearly average of 2% from 2020-22. Its landlocked (or land-linked) nature and infrastructure bottlenecks in transport and energy add to its trade costs. Malawi’s trade-to-GDP ratio declined in general over the review period, mainly due to reduced merchandise exports. During the same period, services trade values increased.
Members observed that, despite these challenges, Malawi has implemented several reform initiatives to enhance its economic resilience and improve its trade performance. To reach the targets set in Malawi 2063 on agriculture commercialization, industrialization, and export-oriented growth, the Government resorted to trade policy. In particular, the National Export Strategy II aims to diversify exports and improve the competitiveness of Malawian products in the international market. Some Members pointed out that Malawi’s greater integration into trade is not only essential for fostering economic diversification, but also for enhancing resilience to external shocks and climate‑related disruptions. In this regard, Malawi was encouraged to maximize the temporary relief provided by the IMF’s Extended Credit Facility granted in 2023 to assess the impact of its economic development model. Malawi’s Agriculture, Tourism and Mining (ATM) Strategy was also praised, as well as its plans to improve rail connectivity. Some Members encouraged Malawi to realize its potential for energy exports as well as to strengthen its participation in mineral supply chains by joining the Minerals Security Partnership Forum.
Members congratulated Malawi for several steps taken over the review period to improve the climate for business and investment, including measures to fight corruption; initiatives to enhance its Special Economic Zones; the enactment of the Investment and Export Promotion Act; and ratification of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Malawi was encouraged to drive forward further reforms in areas that impact investment through inclusive consultations. In this regard, Members welcomed Malawi’s efforts to advance women’s economic empowerment and promote the development of MSMES, many of which are led or owned by women.
Members noted that Malawi had recently established a permanent mission in Geneva. They highly appreciated its active participation in the WTO, including by ratifying the Trade Facilitation Agreement in 2017, joining the Agreement on Investment Facilitation for Development in 2024, being the Focal Point for Trade in Services in the LDC group, and engaging in the informal working group on trade and gender. Several Members thanked Ambassador Bwanali Mussa for her able chairmanship of the Working Group on Trade, Debt and Finance. Malawi’s improved record of notifications to the WTO was appreciated. Nevertheless, it was encouraged to submit all pending notifications to increase transparency of its trade regime. Malawi was encouraged to ratify the first phase of the Fisheries Subsidies Agreement (and the Minister has made a commitment to do this as soon as possible) and thereby demonstrate its commitment to the health of the oceans, and to participate in the joint statement initiatives on e-commerce and services domestic regulation.
Members welcomed efforts to simplify customs procedures and facilitate trade, including through developing one-stop border posts and the impending rollout of Malawi’s National Single Window. These should reduce trade costs and border congestion. While it was noted that Malawi did better than the LDC average in terms of implementing TFA commitments, it was observed that more could be done to help to reduce trade costs and increase predictability. For example, some concerns were expressed about the cumbersome requirements introduced by the 2018 Control of Goods Act. There was significant interest in Malawi’s participation in the AfCFTA, with information being requested on Malawi’s plans to join the AfCFTA’s Guided Trade Initiative. Malawi was also commended for the enactment of new laws in the areas of intellectual property rights and competition policy.
By now, Malawi has already responded to most advance written questions. This review will be successfully concluded in a month’s time when Malawi replies to all outstanding questions. I am certain that Malawi will feel encouraged by the importance that Members have attached to this exercise. I hope the delegation will also bring home the constructive comments that it has received, and further develop its economic and trade policies, with a view to enhancing its competitiveness in the global economy, and its participation in the multilateral trading system.
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