Malawi’s exports to the United States (US) through the African Growth and Opportunity Act (Agoa) preferential trade window continue to dwindle, with latest figures showing a 60 percent decline in one year.
The 2020 Agoa figures prepared by the US Government show that Malawi’s exports to the US market declined to $13 million (about K10 billion) from $33.55 million (about K27 billion) the previous year.
Malawi is one of 45 sub-Saharan African beneficiaries of Agoa, which provides trade preferences for quota and duty-free entry into the US for certain goods.
Notably, Agoa expanded market access for textile and apparel goods into the US for eligible countries, though many other goods are also included.
University of Malawi’s Chancellor College economics professor Ben Kaluwa said in an interview yesterday that for Malawi to fully enjoy the benefits of being part of preferential and bilateral trade agreements such as Agoa, it needs to diversify its export base to address supply side constraints.
He said: “Malawi has other constraints other than the low export base.
“Some of these include the increase in cost of production, which has made our exports more expensive.”
On her part, Economics Association of Malawi (Ecama) president Lauryn Nyasulu earlier urged authorities to ensure that the country addresses underlying structural constraints to boost exports to narrow the trade deficit.
She said: “What is needed for countries such as Malawi is to promote production of goods and services for export.
“The country needs to address its weak manufacturing base and ensure industrial policies aimed at preferential treatment, especially those concerning small and medium enterprises are in place.”
Figures show that Malawi’s exports to the Agoa market have been falling steadily for the past five year. In 2017, exports amounted $43.3 million (about K34 billion).
The continued drop is despite the country having the National Agoa Response Strategy to increase exports from Malawi to the Agoa trade window by about 20 percent by 2022.
Agoa is a law approved by the US Congress in May 2000. After completing its initial 15-year period of validity, the Agoa legislation was extended on June 29 2015 by a further 10 years to 2025.