Malawi Govt moves to boost South Sudan deal

Immediate-past minister of Trade Sosten Gwengwe (L) and Mawien exchange the signed document in Juba, South Sudan in June 2021 (mwnation.com)

 

Ministry of Trade and Industry has urged exporters to constantly engage the Malawi Investment and Trade Centre on the export opportunities and trade requirements in South Sudan.

Secretary for Trade and Industry Christina Zakeyo said in a statement made available to Business News that the export volumes are expected to increase as the memorandum of understanding (MoU) with South Sudan will be automatically renewed for another five years.

Zakeyo said: “This process has been further cemented through the negotiation of a $2.5 million [about K2 billion] Regional Transit Guarantee Facility between Government of Malawi, through the Export Development Fund [EDF], and the African Export-Import Bank [Afreximbank].

“Through this facility, Afreximbank will serve as a continent-wide guarantor, providing transit bonds covering transit risks. The MoU is, therefore, intact and the supplies of maize flour, rice, among other products, continue to be exported to South Sudan.”

On June 10 2021, Malawi, through the Ministry of Trade and Industry, signed an MoU with the Republic of South Sudan to promote the export of products such as maize flour, sugar, rice, groundnuts and beans.

The deal,worth $295 million (about K243 billion) per annum, runs for five years.

However, for the deal to be fully operationerised, it is imperative that the two countries agree on quality standards.

Said Zakeyo: “This resulted in the signing of an MoU on standards between the Malawi Bureau of Standards and the National Bureau of Standards of Republic of South Sudan.

“This MoU will ensure that there is seamless trade and market access into South Sudan, thereby allowing the shipment of higher volumes of exports thereto for the next five years.”

South Sudan Minister of Trade Kuol Athian Mawien is on record as having said the country was facing a deficit of cereals estimated at 465 600 metric tonnes (MT).

By September 2021, figures from the Ministry of Trade and Industry showed that Malawi had received trade inquiries worth $165 million (about K133 billion) from South Sudan for various agricultural products, including maize flour, groundnuts, sugar, beans and rice.

For maize flour alone, Malawi was expected to export to South Sudan about 180 000 MT.

National Working Group on Trade Policy chairperson Frederick Changaya, who is also Applecore Grain & Milling Limited managing director, had earlier called on government to continue exploring external markets for non-traditional crops farmers.

He said: “Obviously, prices will collapse with high production, cleverly, government should expand local to external markets. It will be disappointing to raise farmers’ hopes with better prices only to have highly suppressed prices next year. Government should plan ahead to sustain the current momentum.”

Ministry of Trade and Industry figures show that Malawi’s exports to South Sudan in 2020 were estimated at $3 million (about K2.5 billion) while imports were estimated at $15 585 (about K12.8 million).