Blantyre-based investment advisory firm, Nico Asset Managers Limited, has said exports are likely to grow modestly in 2016 after low returns experienced in 2014 and 2015 because of a shutdown of Kayelekera Uranium Mine in Karonga.
In its October 2015 Monthly Economic Review, Nico Asset Managers said export growth will be robust between 2016 and 2019 underpinned by government efforts to promote production of cotton and other agricultural commodities.
But to achieve the feat, the firm said there is need for the country to diversify into other foreign exchange generating sectors such as mining and tourism if the country is to be competitive and reduce economic risks.
Reads the report in part: “Lower export values and volumes will reduce the inflow of forex which would hamper the recovery of the economy in the event of an economic downturn and put stress on the forex reserves and the kwacha may depreciate further than expected.”
The firm, a subsidiary of Malawi Stock Exchange (MSE)-listed Nico Holdings Limited, has urged the country to, among others, explore local production of goods currently imported; move into local fertiliser manufacturing to reduce import costs; increase promotion of tobacco alternatives such as cotton, coffee and peas and control imports of products with local substitutes.
The report said persistently weak export base can affect kwacha’s stability against major trading currencies. n