Malawi’s decision to join the Central Corridor Transport Facilitation Agency has raised hopes among the business community and the government of improved efficiency gains.
The agency, a key multimodal transport network, plays a vital role in linking landlocked countries in the region such as Malawi to the Indian Ocean port of Dar es Salaam in Tanzania.
Speaking in an interview yesterday, Minister of Transport and Public Works Jacob Hara said
joining the Central Corridor is a strategic decision as Malawi’s affiliation to the agency is expected to yield several benefits.
He said: “We believe that this partnership will significantly enhance our access to the sea and regional markets, promoting trade and economic growth in our country.
“Malawi’s accession to the Central Corridor Transport Facilitation Agency is expected to yield several benefits, including reduced trade costs, improved infrastructure, enhanced trade competitiveness and increased regional integration.”
Malawi is globally recognised as one of the largest landlocked developing countries which depend on its neighbours to gain access to international trade markets.
Drawing a comparison between trade costs in Mozambique and Malawi, the World Bank in its Harnessing Natural Resources for Economic Transformation Report, found that shipping a container from China to Beira Port in Mozambique costs about $3 000 (about K5.1 million) less than transporting the same container from Beira to Malawi.
The bank indicated that while transport and logistics costs are high in many countries, those faced in Malawi and other landlocked developing countries in sub-Saharan Africa translate to competitive disadvantages, including poorly developed and undermaintained physical infrastructure, lack of regional and international transport connectivity, inefficient logistics services and poor access to shipping services.
Malawi Confederation of Chambers of Commerce and Industry president Lekani Katandula said in an interview yesterday that businesses are looking forward to the efficiency gains expected from Malawi’s decision to join the agency.
“Anything that helps us improve our competitiveness is a welcome development,” he said.
National Working Group on Trade Policy chairperson Frederick Changaya said in an interview yesterday the development opens up yet another route and increases the country’s land-linked status which ordinarily should reduce transport costs.
He said: “Any initiative that creates room for cost reduction and flexibility, for example, as alternative routes to Mozambique, is a welcome development.
“It is my prayer Malawi will use the corridor more for exports and less for imports and that we will develop rail connectivity from Malawi to Dar es Salaam.”
The contribution of trade as a share of the gross domestic product has been declining from 66 percent in 2013 to 35 percent in 2020, a situation which Oversees Development Institute said is due to the undiversified export basket, with more than half made up of tobacco.
With Malawi’s inclusion, the corridor’s reach extends across six countries, namely Tanzania, Burundi, Rwanda, Uganda and the Democratic Republic of Congo.
Some of the expected benefits Malawi will accrue from the agency include reduced trade costs, improved infrastructure, enhanced trade competitiveness and increased regional integration, according to the Central Corridor Transport Facilitation Agency
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