Malawi exports to EU down 27.8%
Despite Malawi having a number of trade agreements with the EU, trade between the two has increased by a paltry 2.9 percent over a nine-year period from $720 million (about K533 billion) in 2009 to $741 million (K548 billion) in 2018, with trade tilting in in favour of the EU.
Figures show that Malawi has been importing more from the 28-country European Union (EU), with figures showing that imports have increased from $275 million (about K204 billion) in 2009 to $420 million (K311 billion) in 2018.
At the same time, exports to the EU have declined by 27.8 percent from $445 million (about K330 billion) to $321 million (about K238 billion), moving the trade balance from a surplus of $170 million in 2009 to a deficit of $99 million in 2018.
The figures are based on findings from the EU’s commissioned study on the Assessment of The Merits and Demerits for Malawi Concluding and Signing an Economic Partnership Agreement (EPA) with the EU.
The study shows that Malawi depends on raw commodities for exports, which have low value and subject to price fluctuations on the international market. About 66.2 percent of Malawi’s exports to the EU are made up of beverages and tobacco, with 20.5 percent being food products.
Between 2014 and 2018, for instance, Malawi’s exports to Spain declined by 30 percent, to the UK dropped 18 percent, to Poland fell by nine percent and to Germany slackened by four percent, with Italy recording nine percent and Netherlands six percent growth.
On the other hand, import growth for printing industry, machinery, mechanical appliances, boilers, parts, electrical machinery and equipment and parts, vehicles and fertilisers, between 2016 and 2018, have been high except for pharmaceutical products, whose imports growth was negative.
Malawi has had a long-standing trade relationship with the EU under the successive EU non-reciprocal trade arrangements for the ACP Group, starting with the Yaoundé to Lomé conventions (from 1969-2000) and the Cotonou Partnership Agreement (CPA) from 2001-2007 and Everything but Arms (EBA) for least developed countries.
Malawi Investment and Trade Centre (Mitc) public relations manager Deliby Chimbalu said in an earlier interview that much as there are existing export opportunities worldwide, Malawi is still grappling to fully benefit from such opportunities due to several structural outstanding challenges.
Earlier, EU Ambassador to Malawi Sandra Paesen said there is more room for Malawi to improve if the country is to fully benefit from the EU-Malawi trade relations, a development she said needs implementation of the right policies.
EU is Malawi’s major export trade partner accounting for 39 percent of Malawi’s total world exports.
