Demand for Malawi goods in SA stagnant

Demand for Malawi’s goods in South Africa (SA) has been stagnant for the past four years, figures compiled by SA-based Trade and Law Centre (Tralac) show.

The Tralac recent trade brief shows that Malawi’s exports such as coffee, sunflower seeds and oil seeds, to SA have remained stagnant, particularly between 2012 and early last year.

A trade analyst who has been involved in the National Working Group on Trade yesterday said it is not surprising that Malawi’s exports to SA have been stagnant, and sometimes declining, arguing that the country still remains a predominantly importing country.

He said Malawi—an agro-based economy— despite potential and capacity, does not do more to produce a wide range of crops that could compete on the global market.

“Although faced with a number of challenges, Malawi’s agriculture sector, which is our main of export earner, is not fully exploited. We have over the years relied on tobacco as our main export commodity.

‘We, therefore, have to start considering other products that can equally be significant to our exports,” said the analyst who preferred anonymity because of the nature of his job.

He said quality should also be key in production process.

According to the report, Malawi earned $68.34 million (about K50 billion) in 2013 and $68.35 million (K51 billion) in 2014 from exports to South Africa, a country which is traditionally considered Malawi’s largest trading partner. This represents a 0.02 percent increase.

Malawi is still a net importer with is imports dwarfing exports, making irrelevant government’s policy direction to turn Malawi into an export destination.

Bankers Association of Malawi (BAM) president Misheck Esau  earlier cautioned the private sector to rethink its business model towards diversification into exports to mitigate the risks.

Upbeat about 2016, Ministry of Trade and Industry spokesperson Wiskes Nkombezi said yesterday Malawi could boost exports this year on the back of policies that it is putting in place to enhance access to and cost of finance for small and medium enterprises (SMEs).