Trade deficit jumps K1.4tn in 10 years
Malawi’s trade balance worsened over a 10-year period to K1.4 trillion in 2020 from K159 billion in 2010, National Statistical Office (NSO) latest figures show.
An NSO Trade Statistics Brief for July to December 2020 show that in the past decade, Malawi imports rose threefold from K325.8 billion in 2010 to K2 trillion in 2020 while exports rose fourfold from K166.7 billion to K574.6 billion, creating a negative trade balance of K1.4 trillion.
In an interview yesterday to comment on the figures, Ministry of Trade spokesperson Mayeso Msokera said the country’s export basket has been highly concentrated with a few traditional agricultural products.
Tobacco alone accounts for over 40 percent of the country’s exports.
Msokera said this has been impacted by a slowdown in production, particularly for tobacco, combined with decreasing prices which has led to a decline in export earnings.
He said: “A few years ago, production in most of the sectors was also dampened by intermittent power outages. However, it is pleasing to note power supply has improved.
“Recently, the economy also experienced another sharp drop in exports particularly in 2020 due to declining global demand and restrictions associated with Covid-19 such as lockdowns. As a result, the economy experienced significant sales declines in most of our export products such as tobacco, tea and sugar.”
Msokera said the ministry is banking on the National Export Strategy (NES II) for a turnaround and the commencement of trading under African Continental Free Trade Agreement, which will cover a market of 1.2 billion people and estimated $3 trillion in combined gross domestic product, to boost exports through expanded market.
Among other things, NESII is focusing on diversification of export markets and products and enhancing industrial development through manufacturing of value-added products for exports.
“The government is now positioning and promoting more sustainable value chains beyond tobacco that have strong potential to command higher export earnings. These include industrial hemp, oilseeds, macadamia, poultry, plastic and plastic products, pharmaceuticals, wood and wooden products, textiles and apparel and mining products,” said Msokera.
On his part, National Working Group on Trade chairperson Frederick Changaya said that lack of diversification and politicisation of trade policies is stiffling trade activities in the country.
Meanwhile, tobacco remains the country’s major export product, with NSO figures showing that during the second half of 2020, the country exported tobacco worth K187.7 billion, representing 57.5 percent of the total exports.
Sugar and confectionaries came second at K28.1 billion, representing 8.6 percent of the total exports and oil seeds came third at K24 billion.
In 2020, the top imported commodities for Malawi were fertiliser and printed items, among others.
