Unctad speaks on export diversification
The United Nations Conference on Trade and Development (Unctad) says Malawi, alongside other developing African countries, continues to have lower level of export diversification, relying on a few commodities for export.
In a recently published report on Export Diversification and Employment, Unctad observes that African countries have consistently performed worst on export diversification while at the same time; diversification has remained at the same level since the mid-1990s.
“Exports in Sub-Saharan Africa have demonstrated a high degree of dependence on a few primary agricultural or mineral exports. Some have attributed the dominance of agriculture and natural resources in African exports to the region’s vast arable land and wealth of mineral resources. It has been estimated that unprocessed mineral and energy accounted for 80 per cent, on average, of African exports,” reads the report in part.
Agricultural products continue to dominate Malawi’s export basket, accounting for about 80 percent of Malawi’s exports. This makes Malawi very vulnerable to external shocks.
Research findings on the country’s diversification by Henry Kankwamba, Mariam Kadzamira and Karl Pauw observed that crop diversification in Malawi has deteriorated nationally in different Agricultural Development Divisions (ADDs), although beneficiaries of the widely-implemented Farm Input Subsidy Programme (Fisp) have become more diversified with crop diversification varying significantly across agro-ecological zones.
Earlier, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira said introducing incentives into the no gone areas for industries and consulting concerned stakeholder before implementing government policies would help encourage economic diversification by industries.
According to the International Trade Centre (ITC), Malawi is yet to exploit her significant untapped export potential across diverse products, estimated at $333.5 million (about K246 billion), a development that is a contributing factor towards the country’s worsening trade performance.
Secretary to Treasury Ben Botolo is on record having said government is currently focusing on and encouraging diversification of foreign exchange earnings saying though tobacco brings in foreign exchange, the extent at which the cash crop has played a part in foreign reserves has been minimal of late hence looking at alternatives to boost the foreign reserves.
Agricultural products continue to dominate Malawi’s export basket, accounting for about 80 percent of Malawi’s exports. This makes Malawi very vulnerable to external shocks.
