The National Working Group on Trade Association says lack of diversification and politicisation of trade policies is stiffing trade activities in the country.
The group’s chairperson Frederick Changaya said the seasonality of agricultural exports and the Covid-19 cannot the only reasons for the colossal trade balance.
He said: “Stating that exports have fallen because of seasonality of agriculture exports is very basic. We should state that the reason for such is failure for the economy to diversify away from its reliance on farming.
“Using the Covid-19 pandemic to explain fall in exports wouldn’t be justified. What could we have exported that could have made a difference to the numbers if Covid-19 wasn’t there?”
The sentiments follow recently published RBM figures indicating that merchandise trade account deficit narrowed in the first quarter of 2020 as both exports and imports contracted sharply on the back of weaker demand as countries started to lock down to fight Covid-19.
During the review period, exports were estimated at $128.3 million (K95 billion), down from $306.7 million (K223 billion) traded in the preceding quarter and $175.4 (K130 billion) million exported in the corresponding period of 2019.
Imports on the other hand were estimated at $498.1 million (K369 billion) in the review quarter, which was a 36.5 percent reduction from $784.2 million (K580 billion) imports estimated in the previous quarter.
Meanwhile, overall balance of payments (BoP) , as measured by the change in net official reserves registered a negative balance of $141.2 million (K105 billion) due to Covid-19 during the first quarter of 2020, compared to a surplus of $145.8 million (K108 billion) in the previous quarter and a surplus of $17.9 million (K13 billion) in a corresponding period in 2019.
Ministry of Industry and Trade spokesperson Mayeso Msokera, in an earlier interview, admitted that Covid-19 pandemic would affect volumes of trade between Malawi and its major trading partners that are adopting measures to mitigate the spread of the virus.
“Governments across the world have instituted travel bans, and as a consequence, this will certainly lead to a slowdown in business, which would definitely limit trade between Malawi and other countries,” he said.
Over the years, Malawi’s imports have been outweighing exports despite a number of interventions to reverse the trend.