"We have launched a campaign to flush out illegal foreign investors...the influx of Chinese and Nigerian traders is causing a big problem, " Lipenga said.

He said several shops owned by Chinese nationals were shut down in the administrative capital Lilongwe, where they were found to have flouted business licencing procedures.

These include a requirement to invest a minimum of 50,000 dollars (35,200 euros) in any project in order to be issued a residence permit.

"It is imperative that foreign traders should follow the country's investment procedures," Lipenga said.

Malawi blames laxity in enforcing trade laws in the past ten years leading to foreigners peddling in the informal sector.

A former trade minister, Martin Kansichi, last year led armed police on inspections in Lilongwe and ordered shops operated mainly by Nigerians, Pakistanis, Indians and Chinese to shut down.

One of Africa's poorest countries, Malawi has a bustling business in informal trade that helps support some of the millions living in poverty.

Malawi's failure to attract investment is largely blamed on poor infrastructure, high transport costs, a shortage of skilled manpower and lack of full implementation of investment incentives for expatriates.

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