The Malawian government’s attempts to kickstart domestic production have yet to bear fruit.
Ahmed Bakali runs a fabric shop in Malawi’s commercial capital, Blantyre. Around 90% of materials found in his shops are imported – the 10% that is locally made often stays on the shelf “because many Malawians seem not to like it”.
“I am sorry to say that most of our customers prefer to buy imported fabrics. Hence the stock goes faster than that of locally made clothing. I think the problem is that local manufacturing companies, compromise a lot on quality,” he says. “People these days go for stylish and high-quality products which many local manufacturers are finding it difficult to achieve.”
The continuing dominance of imported products is undermining a decades-old pro-local products campaign in Malawi, “Best Buy Malawian”, which aims to urge people to buy locally made products as well as to slow imports, which hurt the country’s agriculture-focused economy.
More than 80% of Malawi’s population work in agriculture, and the campaign was aimed in part at helping them to find markets for their produce in the country’s main supermarkets, which themselves rely on imports.
The government augmented the campaign in 2012 by launching the National Export Strategy (NES), whose aim was to double the country’s export value by 2018. In 2014, Malawi’s exports were around $1.3bn, compared with imports of $2.8bn.
The Reserve Bank of Malawi predicts that imports will rise to $3.3bn in 2015 – an increase that is not offset by growing exports.
Catastrophic floods in January and February overwhelmed more than 35,000 hectares of farmland, damaging agricultural output and deepening the country’s reliance on imported food.
In his inaugural speech in parliament in June 2014, President Peter Mutharika pledged to kick-start economic empowerment through the NES scheme and Best Buy Malawi. However, little has changed, and Malawians’ appetite for foreign commodities continues to grow.
Alongside used motor vehicles from Japan and second-hand electronic gadgets from South Africa, traders import almost everything, including tomatoes, dried fish, eggs and clothing.
Supermarket traders in Blantyre have argued that they import vegetables and dry fish just because local suppliers fail meet their demand for quality and consistency.
“I had a supplier of vegetables from Ntcheu district but I terminated the contract because of his erratic supply which greatly affected my business. I am now comfortable with vegetables I import from South Africa and Zimbabwe,” says a supermarket owner in Blantyre, who requested anonymity.
Quality is also a concern for textiles trader Bakali, who says that for the campaign to gain momentum, the government will need to create a more conducive business environment.
Thomas Chataghalala Munthali, an economist, says that the government and local manufacturers need to address the perception that locally-produced goods are of low quality.
“True, other products leave a lot to be desired by way of content and packaging although the generalisation can be toxic,” he says.
Munthali believes that the government should put in place a stricter tax regime for imported goods to improve the competitiveness of local manufacturing businesses.
“The government should offer strong import taxes on those luxurious products that can easily be made locally like sofa sets, agricultural products and the like,” he says.
Malawi’s reliance on imports was drawn into sharp focus in 2013 after international donors withdrew their aid to the country following the so-called ‘Cashgate’ scandal.
Auditors revealed that around $250m had been siphoned out of government funds to pay for nonexistent goods and services.
In response, donors suspended $150m worth of budget support, creating a critical shortage of foreign exchange. Just under 40% of Malawi’s annual budget is donor-funded.