Export diversification Still slow, says report

Malawi’s is yet to make meaningful headway in its export diversification drive, with figures from Malawi Revenue Authority (MRA) showing that raw products are topping the export commodities list.

In the absence of export diversification, the economy’s concentration on a few agro-based commodities makes it vulnerable to weather and trade related shocks.

According to MRA, tobacco, tea and macadamia topped the country’s export list, generating $8.015 million (K5.9 billion), $7.434 million (K5.4 billion) and $3.213 million (K2.3 billion), respectively in 2016.

Reacting to the development, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) head of public private dialogue Hope Chavula said this shows that the country is not aggressively moving towards value addition.

“This shows that as a country, our export base is still being dominated by traditional agricultural exports. However, this just shows that we are not moving into value addition and instead we are relying more on these agricultural commodities which have low margins,” he said.

In an interview, Tobacco Control Commission (TCC) acting chief executive officer David Luka said they hope to make more out of tobacco exports through the national single window (NSW) which is in the offing.

“Tobacco being a top export earner, we are sure the implementation of the single window programme would help us to generate the real value of the export earnings as the challenge now is on how the values of those exports are arrived at. As a regulator, we are more experienced in the leaf and the values,” he said.

NSW programme—a one-stop electronic platform for exchanging information between traders and government agencies—is expected to reduce human interface as most approvals would be granted by the systems, according to Ministry of Industry, Trade and Tourism spokesperson Wiskes Nkombezi.

Secretary to Treasury Ben Botolo is on record as having said that government is focusing and encouraging diversification of foreign exchange earnings.

He said though tobacco brings in more foreign exchange, the extent to which the cash crop has played a part in foreign reserves has been minimal of late; hence, looking at alternatives to boost the foreign reserves.

Agricultural products continue to dominate the export basket, accounting for about 80 percent of export earnings but remains mostly undiversified. n