Nico Asset projects export growth in 2016

Exports are expected to grow modestly in 2016 as government continues to boost the legumes sector, Blantyre-based investment management and advisory firm, Nico Asset Managers have said.

Malawi’s key exports have been on the decline in the past years due to slow growth in developed markets and an economic downturn in Sub-Saharan Africa.

According to World Bank statistics, Malawi’s exports slumped by 10 percent in 2015 to $1.58 billion compared to $1.75 billion worth of exports in 2014.

However, in its February monthly economic report, Nico Asset Managers said prospects for improved exports in 2016 are high.

The investment managers said they expect exports to grow significantly between 2016 and 2019 on account of government’s efforts to promote production of cotton and other agricultural commodities.

“The government is promoting the production of legumes and it is estimated that the country can earn $1 billion from legumes exports.

“On the other hand, the government has stated that they will continue using the current export strategy in order to boost export growth,” reads the report in part.

The firm argued that an increase in export values will in turn increase the inflow of foreign exchange, which will help the kwacha to appreciate.

Nico Asset Managers, however, said import growth might be constrained in 2016 as a result of government’s tight fiscal policy stance, weak foreign-exchange inflows and low oil prices.

Minister of Finance, Economic Planning and Development Goodall Gondwe in his 2015/2016 Mid-year Budget Review Statement said the government is optimistic that smallholder farmers will heed calls to boost production of leguminous crops, as high production will increase foreign exchange reserves.

Similarly, Gondwe said the concomitant increase of foreign exchange that will result from the exportation of the leguminous crops will on the other hand supplement the dwindling tobacco exports.

“If this case be as it should be, our balance of payments position should improve and exchange rate could stabilise,” Gondwe said.

He indicated that in the medium-term government also expects exploitation and exportation of mineral resources to increase exports. n