Despite the 27-member European Union (EU) bloc being Malawi’s major export destination, the country is still failing to satisfy the lucrative market with imports surpassing exports by a wide margin, creating a negative trade balance.
According to the latest National Statistical Office (NSO) trade brief for the period July to December 2012, Malawi exported goods worth K42.8 billion against imports valued K43.2 billion, creating a negative trade balance of K458.7 million.
As if that is not enough, Malawi’s trade balance with the 14-member Southern Africa Development Community (Sadc) market is glaringly wide, indicating that Malawi’s drive to increase its exports is not bearing fruits.
During the period under review, Malawi exported goods worth K36.6 billion against imports at K151.6 billion, with a negative trade balance at K115 billion, the NSO figures show.
Even with the 19-member Comesa market, the situation is ugly, with imports at K25.9 billion outdoing exports at K22.6 billion, exposing the wide negative trade balance at K3 billion.
It is only trade with North America in which Malawi registered a positive trade balance of K7.1 billion, with total imports valued at K15.1 billion against total exports at K22.2 billion, indicating that the country is benefiting from this trade bloc.
Malawians’ insatiable appetite for imports from the Far East is evident from the total imports in the period valued at K67 billion against total exports at K32.2 billion, creating a negative trade balance of K34.7 billion.
On the overall, NSO says although there was an increase in the value of exports by 39 percent during the second half of 2012 compared to the same period in 2011, the increase in the value of imports by 89 percent for the same period caused the trade balance gap to widen.
The trade balance gap increased from around K73 billion in 2011 to around K202.2 billion in 2012.
However, Malawi Government’s annual economic report 2013 shows that the country’s trade deficit worsened in 2012 to K365.2 billion compared to a deficit of K135.5 billion prior year.
During the period, total merchandise exports recorded an increase of 39 percent for the period of July to December, 2012 as compared to the same period in 2011, with the total exports value for the period at around K178.6 billion while that of the same period in 2011 was around K128.8 billion.
“Tobacco remains the major export product for Malawi. During the last half of 2012, tobacco contributed 54.7 percent to the total exports, uranium came second with 9.7 percent and was followed by groundnuts with 4.4 percent.
“Canada was the major destination for Malawi’s exports for the period while South Africa, Belgium, Switzerland and China ranked second, third, fourth and fifth respectively,” reads trade brief in part.
On the other hand, total goods imported increased to K380.8 billion in the second half of 2012 from K201.7 billion same period prior year, representing an increase of 89 percent.
“The main commodities imported during this period were petroleum which accounted for 13.1 percent, followed by fertilisers at 8.2 percent and medicines at 5.3 percent. South Africa, China, Mozambique, India and United Arab Emirates ranked first, second, third, fourth and fifth respectively as origins for her imports during the period,” according to the NSO trade brief.