Could you provide us with a general overview of MEPC and its main functions?
Our main function, as suggested by the name, is to promote exports. This is due to the fact that the country needs foreign exchange, so it was a deliberate action by the government to put an institution of this sort in place to develop exports.
Throughout the past two years our major achievements have been the diversification of products as well as markets. There has been quite a problem in the regional markets recently due to increased competition, and this has meant that there was a need to position ourselves better. The country has relied heavily on tobacco, so there has been a strong initiative to move away from this focus on tobacco. As a council we have managed to identify new products, such as paprika, and I am pleased to mention that paprika production has doubled over the past two years.
We are also moving into new, non-traditional areas, and our main focus for this has been food processing, with a strategy to capture some market share in South Africa. We have also managed to pierce niche markets in Germany, for instance, specifically in agriculture. In terms of regional markets, we have plans to strengthen our position as well, and we are currently focusing on upgrading the skills of our exporters to get them ready for the regional market liberalization.
Why is this a suitable market for imports, exports and business in general? What incentives are being created so that Malawi will stand out from the region?
We have export and investment incentives in place, even though it is true that we have to make them more competitive.
Presently, the government allows certain refunds relative to input for the manufacturing of value-added products. Malawi is not richly endowed with many natural resources, but it has hard working people which constitute a strong labor force.
Another advantage is that our coffee and our rice taste different, so in fact it is a niche market we have created. We can produce almost anything in the agricultural field, in comparison with other countries which might not have the right soil or fertile ground. This is yet another area which separates us from other countries. Moreover, there have been competitiveness studies which indicated that we have strong potential in the food and agricultural processing.
Having said this, what is your strategy for growth?
The Minister of Commerce and Industry is working on a policy review with a focus on small and medium enterprises to build them into long term businesses which could open up new export possibilities. With this new policy we hope to have very aggressive approaches to diversification and export growth.
Where are you targeting your exports to?
Mostly the regional market. We have had difficulties exporting to the European Union, because of their high requirements. If we look at Germany, for instance, their laws and regulations are quite inhibiting. We have a local firm here which could not export there because their products were not biodegradable.
On the other hand, the regional markets look more accommodating, and we are members of Comesa so our main focus is within this market.
How have you benefited from the process of regional integration?
Currently we are facing an onslaught of competition, but we still believe that we are benefiting because competition inevitably breeds greater degrees of efficiency. Gradually we are seeing some companies waking up, which we believe is a positive aspect. Accessibility to markets is improving, and we are now getting rid of numerous MTPs which had been a problem. At least now there is transparency and we can tackle new markets with more ease. So as a result of competition productivity is increasing, marketing skills are improving and market access is also deepening.
For example, we conducted a survey a few years ago that Mozambique had great potential as a trading partner, but the problem was duties, which were up to fifty per cent. So we believe that when these protocols come into place, the duties are reduced which substantially opens up access.
In your opinion, what is your mission for this organization?
What we need to do is make sure that we have enough resources. To achieve any mission you must have the proper funds, and at the moment we are 100 per cent funded by the government. However, the government does not have unlimited resources and it cannot give us the level of funds which we always need. In terms of mission itself, the traditional exports are tea, tobacco and sugar, but it is time to concentrate on other things as well.
What is the future of Malawi’s exports?
We do not have minerals or mines, so our future is to produce for the export market – we just have to organize ourselves to do it.
Our main thrust now is product development. We believe that we should develop quality and range, and I think we should be cognizant of this. The main thrust of the government is the identification of highly potential export products, and we believe that the solution is not concentrating on one crop (like tobacco), but rather developing a number of key agricultural products. We traditionally have an agricultural economy, so the adjustment would be much easier. we feel that the potential is enormous if we can upgrade ourselves to processing of agricultural products instead of just exporting raw materials. We found that quantity is a problem, so we are also in the process of organizing co-operatives or associations to unite small, scattered producers.
| What we need to do is organize ourselves, and our products tend to be really unique so we are able to set up niche markets. So we need to further promote the potential which we have here in Malawi.
If I am an American, European or Asian investor, why should I come to Malawi to fund joint venture partnerships or for exports, instead of going to Kenya, Zambia or Mozambique? What kind of image does Malawi give to the international community, and should it be changed or enhanced?
We talked about a productive, low-cost labor, which is an asset. Malawi is also one of the most stable countries in the region, and we have the instruments and organizations here to ensure that stability is nurtured.
The privatization initiative is also an important factor. It is driven by the private sector, which demonstrates the commitment of the government to the process as well as its close cooperation with the private sector.
In Malawi we have been accused by some people that we are too liberal – in fact this is really a reflection of our open and free market which supports the private sector.
How conscious is the industry and business community in this country about environmental protection and sustainability?
The export sector is quite open to these needs thanks to their exposure to other markets. In fact we never had an Environmental Ministry before, so the awareness is there, even on a government level. Generally, the business community is conscious of the environmental needs of the country.
What kind of image does MEPC have internationally?
I think we have a very positive image – for example we were the only country which Zimbabwe visited to set up an export promotion institution. When people come to learn from you and to model their organization to yours, I think it says something about you. I think people realize that we are a very small country, but we also have assets which no one can compete with here in the region.
How do you communicate this message to the international community?
We do this through a number of mechanisms. We take part in regional associations, in exhibitions and trade shows.
What does the next year hold for MEPC?
We believe that there is a future in which we will transform ourselves to become self-financing, and we are seriously looking at increasing our funds and commercializing some of our own activities. If we can create value for our customers, we will be in a position to charge for our services.
In terms of export development we believe that the future lies with SMEs (small and medium enterprises). Most of the companies have reached the final stages of their production, so it is the small producers which are capable of absorbing new ideas and diversifying their production.
Does the creation of sectorial associations create more bureaucracy, or is it actually a streamlined system which is actually productively driven, and are they actively driving the economy?
I think we can say that, yes, they are supporting economic development. Looking at all the various associations, they are really pro-active. The small producers are scattered, so if there is an association then it makes it easier to do business. It is a one-stop shop, where there only one chairman and one office and, for example, if you want to organize a seminar there is only one chairman to work with.
How has the situation of MEPC evolved from last year’s? Has it grown or declined?
In terms of capacity building, we have plans to build our capacity because demand is quite heavy, so building our capacity is rather difficult, but we are obtaining assistance from organizations like USAID to train some of our staff.
In terms of outputs, we have an stable base and we are moving into new markets and new products.
Do you think that Malawi is well known internationally?
When I was in the United States, on the west coast, people would confuse Malawi with Maui or Hawaii. So yes, certain people have problems situating Malawi. In the Mediterranean and European countries there is also very little knowledge of Malawi, but in the UK and Germany our visibility is better. Yet within the region we are well known, with strong products and a good recognition.
What would be your final message to our readers?
The message is clear: we need investment in Malawi. We realize that, at the end of the day, it is investment which will develop our resources. I have mentioned that our production base is very low, because there are few financial resources here, so we are hopeful that investors will come to Malawi. I think the message is that Malawi is unique; it is different and has benefited from a strong stability for many years. The uniqueness of our products is also a key factor, and with the proper investment we can thrive. The fish in Lake Malawi, for instance, is in high demand for the entire region, but it has to be commercialized properly. There are a number of other products, like passion fruit, which can be propagated and commercialized. |
Malawi Export Promotion Council (MEPC)