Negative trade balance widens to K330bn
Malawi continues to experience negative trade balance, with imports surpassing exports due to dwindling agricultural export commodities, latest figures from the Reserve Bank of Malawi (RBM) show.
The 2019 Financial and Economic review report for the fourth quarter show that trade balance deficit widened to $446.5 million (about K 330 billion) from a deficit of $399.9 million ( about K285.9 billion) in the previous quarter.
In the review period, exports were estimated at $296.2 million (about K219 billion) compared to $327.1 million (about K242 billion) in the preceding quarter while imports were estimated at $742.8 million (about K549.6 billion) from $726.9 million (about K537.9 billion )in the previous quarter, an indication that the country is still embracing imports.
This was, however, a slight improvement from the $470.1 million (about K347 billion) deficit recorded in the corresponding quarter in 2018.
But Chancellor College senior lecturer in the Economics Department Exley Silumbu observed in an interview on Monday, the country exports cheaper commodities because most products are unprocessed yet it imports processed items which are expensive.
In the 2019 Annual Economic Report government indicated that all values of traditional export products are expected to go down in 2019.
Tobacco, for instance, was projected to rake in $502 million, down from $516 million, while earnings from sugar, cotton, coffee and edible nuts are also estimated to fall in the year.
Ministry of Industry, Trade and Tourism Principle Secretary Ken Ndala recently said Malawi has to capitalise and advance on available strategies aimed at boosting trade adding that Malawi has to enter into more trade arrangements that seek to open foreign markets for our exports.
“The way forward is for firms to embrace the reality and we hold hands in focusing and repositioning towards expanding to other markets,” he said. Ndala said government is committed to address other problems related to high cost of production and doing business which have significantly affected trade competitiveness and capacity to produce.
