A study has shown that Malawi is losing out on potential revenue by failing to develop other crops that have potential for export development despite not being listed under the Malawi Growth and Development Strategy (MDGS) and the National Export Strategy (NES).
The Study, conducted by Export Development Alliance (EDA), has found that Malawi’s export diversification programme is facing challenges because the country has been trying to find a single crop to replace tobacco as a single major foreign exchange earner.
Among others, EDA is proposing the development of Paprika as a potential export crop for Malawi following growing demand for spice oils in the food industry and rising consumer awareness towards health benefits of paprika over traditional raw spices.
EDA Senior consultant Maurice Chimbilima-Gondwe said there is an urgent need to diversify Malawi’s export products due to the problems that Malawi’s traditional export products are facing on the global market which, among others, comprise anti-smoking campaigns for tobacco, and price fluctuations for crops such as tea and sugar.
But he said for the efforts to start bearing fruits, other crops need to be considered alongside the prioritised list of products under MDGS and NES.
“So far, several initiatives have been under taken to achieve that goal by various institutions but unfortunately, the major problem with the diversification programme in Malawi is that as a nation, we have been trying to find a single magic crop, which could replace tobacco at once,” he said.
Chimbilima-Gondwe said EDA believes that the development of Paprika in Malawi is the step in the right direction in enhancing the export diversification process.
“Demand for specialty products has been increasing on account of growing consumer preference towards health benefit products in addition to colouring and flavouring properties, which is expected to open several growth opportunities for paprika market,” he said.
Based on product type, the paprika market can be segmented into vegetable paprika, spice powder, colourant powder and paprika oleoresin.
Europe is the largest market for paprika followed by Asia Pacific and North America. Strong demand for spice oils coupled with colouring food stuff is the key factor to drive the market growth in Europe.
India is the major exporter of paprika to European countries. Within Europe, Spain is the major producer but major demand is fulfilled by imports from India.
In an earlier interview, Minister of Economic Planning and Development Goodall Gondwe said government is on course with its plans to diversify the economy.
“We are doing quite well shifting from tobacco to legumes and people are responding well. We just have to make sure that export earnings are brought back into the country,” he said.
Calls have been mounting on the government to diversify the economy away from tobacco following various challenges facing tobacco marketing in the country’s and on international markets.
Tobacco is the mainstay of the Malawi economy accounting for about 70 percent of the country total foreign exchange earnings.
The NES was launched in 2012 as one of the government’s response to diversification calls targeting the development of oil seeds such as groundnuts.