What is the EBA?

The “Everything but Arms”(EBA) scheme is a permanent arrangement covering Least Developed Countries (LDC’s) as classified by the United Nations. This arrangement enables duty-free and quota-free access for all products (7200 products in total) originating in LDC’s except for arms and ammunition. Different from the Standard GSP and GSP+, LDC’s are not excluded from the scheme if they benefit from other preferential arrangements.

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At a glance: EBA beneficiaries' preferential imports to the EU

group

20,40 M

Population

account_balance

Presidential Republic

Government

trending_up

0.90%

GDP Growth

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19.80%

Inflation

money

$ 13,16 B

GDP

Facts about Malawi's economy

Landlocked Economy

Malawi is a landlocked country located in south-eastern Africa. Most of the country is covered with highlands. About one fourth of the country is covered by Lake Malawi.

Export Products

Malawi's top export product by far is unmanufactured tobacco. Other relevant export products are black fermented tea, macadamia nuts, pigeon peas and raw cane sugar.

Trade Partners

The two most important trading partners are South Africa and China, which each account for a share of about 30% of total trade. They are followed by the EU and UAE. Regional markets such as Kenya and Zambia are among the biggest export markets for Malawian products, though the EU ranks first.

Economic Structure

Agriculture remains the mainstay of Malawi’s economy with tobacco being the most important crop, together with tea, sugar, and cotton. The industrial sector is mainly focussed on processing agricultural commodities.

Tobacco Production

Tobacco is one of the most important sources of income and accounts for more than half of the country’s total exports. The production concentrates on burley leaf tobacco and amounts to an average of 167 million kilograms of tobacco annually.

Trade with the EU

Total trade with the EU amounted to € 324 million in 2021. The EU is after China and South Africa the most important trading partner for Malawi. It ranks first as an export market for Malawian products.

Malawi and the EU (2022)

Imports from Malawi by product section

Imports from Malawi over time (in € m)

MALAWI AND THE EU’s GSP

Economic Impact

93%

The large majority of Malawi's exports to the European market are eligible for EBA preferences.

96.00%

Malawi currently has a very high preference utilisation rate of 96%.

Preference utilisation and export diversification

Malawi's imports to the EU

Preference Utilisation vs. total eligible imports

With a preference utilisation rate consistently above 94%, Malawi belongs to the countries which take the biggest advantage from the GSP across all three arrangements. Imports eligible for EBA preferences have increased substantially since the beginning of the decade. In 2022, about 93% of overall imports from Malawi were eligible for zero duties granted under the EBA.

The largest product sections under EBA

The three largest product sections imported under the EBA are tobacco, processed foods and beverages and agricultural products. However, tobacco alone accounts for 91% of imports under the EBA. While the graph already indicated the high concentration of the export sector on a limited number of products, the number of product sections that take advantage of the free access to the EU market have increased. While EBA preferences were used for 9 product sections in 2016, this has increased to 11 product sections in 2018. This increase coincides with an overall increase in exports by 11%.

SUSTAINABLE DEVELOPMENT

Malawi, as a beneficiary of the EBA scheme, is not obligated to ratify any conventions to be able to benefit from preferential access to the European market. Nonetheless, Malawi has ratified all 15 core international conventions on human and labour rights, which includes 7 UN human rights conventions and 8 ILO conventions on labour standards. Additionally, Malawi has ratified 8 conventions on environmental protection and 4 conventions on good governance aspects.

Core international conventions on human rights and labour standards

Ratified

Convention on the Prevention and Punishment of the Crime of Genocide (1948)
International Convention on the Elimination of All Forms of Racial Discrimination (1969)
International Covenant on Civil and Political Rights (1976)
International Covenant on Economic Social and Cultural Rights (1976)
Convention on the Elimination of All Forms of Discrimination Against Women (1981)
Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
Convention on the Rights of the Child (1990)
Convention concerning Forced or Compulsory Labour, No 29 (1930)
Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948)
Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No 98 (1949)
Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
Convention concerning the Abolition of Forced Labour, No 105 (1957)
Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
Convention concerning Minimum Age for Admission to Employment, No 138 (1973)
Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)

Additional Conventions

Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
Convention on Biological Diversity (1992)
The United Nations Framework Convention on Climate Change (1992)
Cartagena Protocol on Biosafety (2000)
Stockholm Convention on persistent Organic Pollutants (2001)
Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
United Nations Single Convention on Narcotic Drugs (1961)
United Nations Convention on Psychotropic Substances (1971)
United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
United Nations Convention against Corruption (2004)

EU-Malawi Bilateral Development Assistance

DG INTPA

Access all info about EU-Malawi relations on the International Partnerships website: https://international-partnerships.ec.europa.eu/countries/republic-malawi_en

Opportunities in Malawi

Further potential in the agricultural sector. The government supports the diversification of crops especially into soybeans, tea, and sugar.
Government plans to establish Special Economic Zones for the processing of oil seeds and sugar cane, beverage manufacturing, and agro-processing
Recent improvements to the country's infrastructure, including for example improved electricity supply from the Zambia–Malawi interconnector

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