Petroleum oils, chemical fertilisers and cement emerged Malawi’s three most imported commodities in 2012, according to the National Statistical Office (NSO).
Statistics show that petroleum import bill alone stood at K80.5 billion (about $218 million) followed by chemical fertilisers at K47.4 billion ($128 million).
The other most imported item, cement, was worth K45.8 billion.
Ministry of Industry and Trade spokesperson Wiskes Nkombezi, while noting that Malawi has no control over movement in international prices of the three commodity products, said the recent weakening of the kwacha could also explain the increased normal value in the overall import value of the commodities.
“Generally, national prices for petroleum products are governed by international prices and also once the kwacha weakens, prices in Malawi become higher. The prices [of petroleum products in 2012] may not have increased substantially but the weakening of the kwacha could also explain the increase in the fuel import bill,” Nkombezi said in an interview last week.
But he also reasoned that the increase in the fuel import bill last year could also be attributed to increased utilisation of diesel in the country’s major mining investments such as Kayelekera Uranium Mine in Karonga and hoped that once the mining projects are connected to the national grid, the country will experience a lower fuel import bill.
According to Nkombezi, the surge in cement bill could also be explained by the current boom in the construction industry and also banked hopes on emerging cement manufacturing projects in the country, saying they will help Malawi produce its own cement and save foreign exchange in the process.
He added: “On fertiliser, we have little control and we need chemical fertilisers so that we expand our export base.”
In the 2012/13 fiscal year, government allocated K40.6 billion towards the Farm Input Subsidy Programme (Fisp), a figure that local economic commentators say is huge, towards spending on importing fertiliser and other inputs embedded in the programme alone.
According to the NSO figures, about K39 .8 billion (about $108 million) was spent on importing medicaments or pharmaceutical products followed by motor cars and other motor vehicles designed for transportation at K22 billion ($59 million).
Other imports include bulldozers (angledozers, graders, levellers and scrappers) at K11.8 billion, flat-rolled iron products or non-alloy steel (K10.3 billion), electrical apparatus for line telephony (at K9.4 billion), soap (K9 billion), wheat (K8 billion), worn clothing (K6.3 billion), unmanufactured tobacco (K5.9 billion), rubber tyres (K5.4 billion) and insecticides (at K4.9 billion).
A January economic report by the Nico Asset Managers, a Blantyre-based investment management and advisory firm, indicated that imports into Malawi are expected to increase in 2013, reflecting a boost to food and fuel imports by measures to cover essential imports in the wake of the currency adjustment.
“In 2014, imports will rise slightly owing to election-related spending although a weaker currency will constrain demand. Thereafter, imports will continue to pick up on the back of increased economic activity and slightly higher global commodity prices,” reads the economic report in part.
Over the years, Malawi’s export proceeds have been falling short of imports, a situation which has been partly blamed on fuelling foreign exchange scarcity in the country over the past years, as Malawians scrambled for less generated foreign exchange to enable them import foreign-made goods.