Southern African Trade and Connectivity Project (Malawi)
A three-day negotiation meeting on the Simplified Trade Regime (STR) between the Republic of Mozambique and the Republic of Malawi is currently underway in Tete – Mozambique. Senior government officials from the two countries will spend three days discussing how they can contribute towards meeting their commitments in the areas of trade facilitation, and the simplification of customs procedures; both within the context of the SADC Protocol on Trade and in line with multilateral commitments. Implementation of the STR helps to reduce border delays and long queues facing small cross-border traders.
Speaking during the opening ceremony on Tuesday 12 March 2024 the leader of delegation for Malawi, Mr. Limbikani Kachiwaya, Director of MSME and Cooperatives in the Ministry of Trade and Industry said Malawi remains committed to finalizing the framework and ensure it is operational as soon as practically possible.
Mr. Lazaro Macuacua, Director of Legal Office in the Ministry of Industry and Trade in Mozambique said since the last meeting the team had in Johannesburg, South Africa in November 2023, they have been doing more research and inquiries on how the framework can be mutually beneficial to the people of Mozambique and Malawi.
The STR has been designated as a customs and trade facilitation instrument. Informal cross border traders and small-scale cross-border traders face numerous obstacles that prevent them from benefiting from the SADC Free Trade Agreement. Small and informal traders have, for a long time faced a lot of difficulties in meeting the requirements to benefit from SADC FTA and obtaining necessary documentation, such as certificates of origin. The discussions underway in Tete will help to resolve this.
Benefits realized from implementing the STR Framework include the simplification of clearance processes for both the traders and the customs officials, better data collection and monitoring, reduction in the cost and time of clearing goods and promotion of use of designated routes, and reduction in smuggling of goods across borders.
Informal Cross Border Trade (ICBT) contributes about 30- 40% of the total intra-SADC trade, with one study estimating that the average value of ICBT in the region amounts to US$17.6 billion per year. Cross-border trade is observed to play an important role in sustaining livelihoods and food security, especially in border regions. Many of these traders are women, who make major contributions towards trade and agriculture-led growth in most African countries. For instance, the UN Development Fund for Women estimates that women account for about 70% of CBT in the Southern and Eastern Africa regions.
Among other things, the Tete meeting will discuss a Common list of products from Malawi to be considered under the STR with Mozambique, a threshold value for consignments that can be traded and the frequency a trader can trade in a day.
