Malawi Losing US$50m due to Illegal Exports
By Amalawi - Wed Oct 15, 4:32 pm
Malawi: Malawi’s Minister of Industry and Trade Joseph Mwanamvekha has disclosed that the country’s agro-based industry is losing about K20bn, equivalent to about US$50m, every year to illegal exports of produce.
According to the minister this is a worrisome trend for a country whose almost 80% of foreign exchange income is derived from agriculture as the amount being lost is enough to fund a full government department for a whole year.
According to the minister the problem has gone out of hand because most farmers are not aware of the existence of structured markets where they can sell their produce such as commodity exchanges.
Illegal exportation of agriculture produce is done in various ways including smuggling and failure by traders to remit tax on exports, the minister told reporters in Lilongwe when he toured Auction Holdings Limited Commodities Exchange trade house.
To try to curb the problem, Mr Mwanamvekha said the government has introduced a policy being implemented in liaison with the Reserve Bank and the Malawi Revenue Authority to stop renewal of export licenses for traders that do not produce evidence of that they remitted to the country the foreign currency earned from their previous agriculture commodity exports.
“We’re concerned about this and we are doing something about it. Most these traders buy produce from farmers direct from the field. So we have made it a point that any trader seeking renewal of their export licenses must produce evidence of their previous foreign exchange earnings remitted to the country”.
Mwanamveka said the government will embark on a national campaign to educate farmers on the need sell their produce through formal markets.