Malawi’s value of exports rose by 37 percent to $275.4 million (K223.34 billion) in the second quarter (Q2) (April to June) from $201.6 million (about K163.49 billion), figures from Reserve Bank of Malawi (RBM) show.
The figures, contained in the latest RBM Monetary Policy Committee Statement, show that the 36.7 percent growth in exports was against a 15.3 percent increase in imports.
Nonetheless, the figures show that exports, which recorded a $73.8 million (about K59.85 billion) growth, were outweighed by imports at $101.7 million (about K82.47 billion).
During the quarter under review, imports stood at $794.8 million (about K644.58 billion) against exports at $275.4 million, a development which puts the country’s trade balance—the difference between the value of a country’s imports and its exports—at $519.4 million (about (K421.23 billion).
The central bank is, however, upbeat that trade balance would narrow owing to the expected economic recovery.
Reads the statement: “Prospects for the near-term suggest that trade balance could improve mainly anchored by increased global demand as the global economy returns to normalcy, which is expected to induce a gradual rise in domestic exports.”
Malawi’s economy is largely affected by external economic developments which experts partly blame for trade imbalances as imports outweigh exports, a development which contributes to economic vulnerability.
In addition, agricultural products continue to dominate the export basket, accounting for about 80 percent of exports.
University of Malawi economics professor Ben Kaluwa said in an interview on Monday that it will be difficult for Malawi to narrow the trade gap because of the nature of commodities the country relies on as exports.
He said the negative trade balance is a long-term trend, which the country can improve if it only reduces imports by investing in import substitution.
“The country is having difficulties narrowing the trade balance because of what we depend on as exports. Most of these commodities are seasonal and once in off season, the trade balance does widen as we see the case presently,” said Kaluwa.
Ministry of Trade spokesperson Mayeso Msokera also admitted that the trade balance has become a concern, but said government continues to implement policies and strategies to narrow the gap. He said the main focus is to build the export readiness of the country’s exporters and develop regional and global value chains, promoting entrepreneurship with emphasis on micro, small and medium enterprises.