Trade and Law Centre (Tralac) figures show that Malawi is importing more than it is exporting within the Common Market for Eastern and Southern Africa (Comesa) and Southern African Development Community (Sadc) trade blocs.
Malawi Intra-Africa Trade and Tariff Profile compiled by Tralac shows that the country exported $269 million (K277.3 billion) worth of goods compared to imports valued at $934 million (about K963.9 billion) in 2020.
This created a trade deficit of $665 million (about K685.6 billion) during the review period, according to the report.
Economic experts say this situation speaks volumes of the country’s dependence on same products and calls for diversification of exports and market as well as focusing on import substitution.
Reacting to the figures, Malawi University of Business and Applied Sciences associate professor of economics Betchani Tchereni said divesting export products and local production could help address the country’s trade balance, thereby generating foreign exchange.
He said: “There have been a number of trade agreements and treaties signed and Malawi is a signatory, but we are not taking advantage of this.
“We exert a lot of effort to try and penetrate markets in Europe and the west when we could have benefitted even much more by exporting within the region.”
Malawi’s economy is agro-based and agricultural products dominate the country’s export basket, accounting for about 80 percent of all exports.
Ministry of Trade and Industry is banking on Malawi’s strategic approach and target of the National Export Strategy II, which seeks to increase exports as a percentage of gross domestic product (GDP) to 18 percent by 2025.
The ministry’s spokesperson Mayeso Msokera said in an interview the main focus is now to build the export readiness of Malawian exporters, grow the number of products being exported, especially those that can favourably compete with exports on the domestic market.
“The country also aims to develop regional and global value chains, promote entrepreneurship with emphasis on the small and medium enterprises and women and youth entrepreneurs and address critical enablers and cross-cutting issues related to exports.” he said.
The country’s Industrialisation Strategy and Roadmap foresees the lifting of the regional growth rate of real GDP from four percent annually to a minimum of seven percent a year, with the hope that the region would fully benefit from its vast natural resources.
The roadmap also seeks to double the share of manufacturing value-added in GDP to 30 percent by 2030 and to 40 percent by 2050.