Six reasons why resolving the trade impasse between Malawi and Tanzania made sense

Writes Daniel Njiwa

A series of events unfolded over the last few weeks culminating in a landmark agreement to resume trade between Malawi and Tanzania, a commendable gesture and a strong demonstration that Africa is on the right track and committed to charting a homegrown path to economic and #foodsystems transformation. While some of the world’s leading nations are closing their economies, through the imposition of trade tariffs and other measures, Malawi and Tanzania have elected to strengthen ties that guarantee continued and unfettered trade, including for agriculture food products which guarantees their citizens access to affordable and nutritious food.

In March 2025, on the back of constrained import cover and economic stagnation, while seeking to boost local industry growth, Malawi announced import restrictions on 21 products including agricultural foods, Tanzania’s response was immediate, imposing even more stringent restrictions. A major outcry from producers and traders of key food products from both countries ensued with the impact felt as far as neighboring Kenya. As the media began sharing depressing visuals of rotten bananas and frustrated businesspeople, interest groups, including business associations and regional economic communities voiced concerns publicly and privately. Many argued that as countries that are signatories of the free trade area of SADC and AFCFTA, they should avoid these ad hoc trade restrictions in the spirit of economic integration.

At AGRA a key part of our purpose is to build strong agri-food markets and trade at the domestic, regional, and continental levels. Like many partners, we were concerned about the risk of these measures in sustaining food/ nutritional security and resilience within the region. As such, we were compelled to join the process to support the two nations in finding a harmonious resolution. AGRA Malawi and Tanzania country offices with support from its Center for Technical Expertise and FCDO-funded Regional Food Trade Unit began generating evidence and securing critical appointments with officials and ministers to share ideas on the actual and potential implications of these measures imposed by both countries.

We believe the following formed compelling reasons for the speedy resolution of the trade dispute:

1. Commitment of leaders to improve the livelihoods of their people: The sector ministries from both countries demonstrated unshakable commitment to find a solution to the trade impasse. Soon after announcements on import restrictions were made, there was a visible effort by both countries and their foreign offices to reach out and discuss the matter to find a solution. I applaud the political leadership for creating this environment that enabled AGRA and other stakeholders to also find space to share important pieces of evidence that have contributed to the desired outcome.

2. A strong case for food security: Noting that the sub-region has frequently been exposed to climatic and economic shocks and COVID-19 pandemic over the past decade, the stakes are high in ensuring that trade relations are improved. Malawi and its neighbors have also been hit by cyclones and serious dry spells only a season ago resulting in a sharp drop of at least 30 to 50 percent of its food production. The current season doesn’t seem promising.

The Malawi government forecast shows maize harvest will be under 3 million this season which is lower than a national requirement of at least 4 million. All this, coupled with serious economic stagnation has contributed to rising food inflation with prices of key food products like maize more than triple within 12 months from USD20/ 50kg to around USD60/ 50kg a bag in February 2025. AGRAs Food Security Monitor had just forecasted that at least 35 percent of the population had insufficient food which is 21 percent higher than 2 years ago, the last time Malawi had a better agriculture season.

3. Cross-border trade in food: Among some key data points shared, was the fact that Malawi depends a lot on its neighbors during times of deficit where food such as maize, rice and fruits flows from Tanzania, Zambia, and Mozambique. This particular year, because of the cyclone that hit Malawi, Mozambique, and parts of Zambia, Tanzania became the sole source of food inflows. In addition to other inflows, the Malawi government had Malawi had just ordered over 40,000mt from Tanzania, a deal that got impacted by the trade restrictions.

Banana imports from Tanzania into Malawi have also risen over time owing to increasing demand. At a time of food shortage like this, bananas have proven a critical substitute in urban households easing food inflation. Consultations with border officials indicate the country imports at least twenty 20-ton trucks of bananas from Tanzania alone every day during peak season. Others estimate Malawi has a 70 percent shortfall in banana supply. This shows the extent to which more effort and investment in production is required for Malawi to reduce this gap.

Further investigation however shows that the formal value of imports of bananas by Malawi is not significant (averaging <USD1m per annum). In the same vein, the analysis demonstrated a mutual trade reliance between the two countries whereby in good years Malawi has posted a positive trade balance in commodities such as rice. Our analysis further revealed that formal imports (in US dollar terms) are far lower than the reality, owing to bottlenecks like restrictive sanitary and photo-sanitary (SPS) measures, high processing fees, and porous borders, driving most of the trade into informal channels making it almost impossible to control through administrative measures. This led us to another anecdote demonstrating that most of this informal trade is in local currencies disproving the fear that these imports (from neighboring countries) are a major drain on much-needed hard currency in Malawi.

4. Diversifying food sources: Food inflation statistics were perhaps the major discussion point with officials where maize prices are hovering above 70 percent compared to the same time last year. The availability of alternative foods such as roots and tubers or fruits like bananas therefore has been a welcome development in stabilizing prices while influencing food preferences of urban dwellers in Malawi. #Food diversification now becomes an important theme in the face of the changing climate and frequent droughts affecting cereal production. The population should continuously be sensitized about the need to diversify their food sources, which is only possible when these options are available on the market.
5. Shared heritage: The two countries share approximately 475 kilometers of border, and held together by strong social, cultural and economic bonds. Administrative measures to stop trade would have been ineffective and probably counterproductive as it only incentivizes rent-seeking behaviors by regulatory and security agencies at the expense of consumer welfare. The reality is that the two countries share more than just the goods and produce that cross the formal border points in trade. Cultural events, intermarriages, and informal exchange of goods between people on either side of the border will continue to hold the two nations.

6. Planning for long-term goals: As the deliberations advanced, with officials getting more convinced of the greater benefits of more open trade between the two countries and perhaps other neighbors, a more strategic conversation ensued. What is the medium- and long-term outlook of the agri-food sector? What should the country do to avoid these situations in future? As AGRA we pride ourselves in supporting governments’ long-term visioning and prioritization of investments. Here we reminded the officials of the need for systemic and long-term planning to ensure that the economic development agenda that places agriculture at the center is informed by evidence as to where critical growth drivers lie, where productivity gains are likely, and where the youth will be more impacted and impactful.

On the trade facilitation side, and with support from partners like FCDO, Mastercard Foundation, and Gates Foundation, AGRA is working with and supporting COMESA, EAC, and SADC in roll out of a digital Regional Food Balance Sheet to support real-time decision-making, the tripartite Simplified Trade Regime to ease participation of youth and women in trade and addressing non-tariff barriers especially Sanitary Phytosanitary measures through negotiations and implementation of Mutual Recognition Arrangements on bilateral level. AGRA reiterates the need to prioritize investments that are aligned with country agendas, by enhancing private sector engagement and coordination between major economic sectors i.e. agriculture, trade, finance, and the environment.

These engagements with officials were aimed at preparing the political leadership in their decision-making and further engagement with their counterparts across the border. Today, upon this landmark announcement, we celebrate real-time economic and diplomatic cooperation between two countries not only joined by their shared borders and economic interests but also the realization that the cultural and social bond is stronger and that no one will survive without the other. And this should remain the critical ingredient in the African story of economic cooperation.

Daniel Njiwa is the Director for Inclusive Markets, Trade, and Finance at AGRA