Transportation


 Without efficient and inexpensive linkages of goods and services between buyers and
 sellers throughout the country, exchange is minimal. Poor state of the road network is
 often blamed for the high cost of transportation in Malawi. Yet the road network among
 major cities is relatively good. Even in rural areas, roads are usually passable in dry
 weather. While there are some remote areas that badly need improved roads, the biggest
 problem in the transportation sector is that for a number of years the sector has been
 unduly protected from competition. The consequence of this protection is that
 transportation costs in Malawi are twice as expensive as those in neighboring countries
 (World Bank 1996). Fortunately, the level of this protection is now changing. In 1995,
 a ban on second-hand trucks and spare parts was removed. In January 1996, statutory
 domestic freight rates were removed. Additional efforts to expand the size of the fleet,
 especially for small capacity trucks and various forms of local transportation, need to be
 made in order to have a more competitive market.

 Contracts and Law

 Exchange is ultimately based on law. Buyers and sellers need to be able to make and
 enforce legal contracts. Critical to expanded use of contracts is the need for quick and
 inexpensive dispute resolution. In addition, appropriate grades and standard are also
 essential for uniform contracts and for clear understanding of what is being purchased or
 sold.

 Information

 Accurate and current information on market prices is critical for a well functioning
 market. Present data collection and dissemination efforts in Malawi include: MoALD's
 Agro-economic Surveys(AES), statistics and indices prepared by the National Statistic
 Office (NSO), and price data collected under the FEWS Vulnerability Survey. Criticism
 has been made of the present system for collection and dissemination of market price
 information. Much of this criticism relates to limited coverage of price collection
 activities and to how effectively price information is being disseminated. In general, the
 AES system appears to be a good base on which to build a more comprehensive price
 information structure.

Technology

 Technology is basic to efforts to increase productivity and to advance the structural
transformation needed in Malawi's economy. Technology does not exist in a vacuum but needs
the necessary support facilities and education of the population to assure its wide-spread adoption
and utilization.