Malawi loses out in Comesa

 

Malawi’s share of trade in the 19-member Common Market for Eastern and Southern Africa (Comesa) has slumped to 1.9 percent this year from the previous year’s 2.8 percent, according to a report from the regional trade bloc.

At the same, the trade gap has widened from $12 million (about K9 billion) in 2015 to $126.6 million (K93 billion) last year, which means Malawi is importing more from the region than it is exporting.

Trade experts say this is a lost opportunity for Malawi to take advantage of the big market in eastern and southern Africa, which has a gross domestic product (GDP) of $657 billion and a population of 500 million people.

In the year under review, Malawi earned $153.6 million (K113 billion) from exports with a 1.9 percent market share but spent $280.2 million (K205 billion) on imports, gaining a 3.5 percent market share. This represents a trade gap of $126.6 million.

During the same period last year, the country exported $212 million (K155 billion) worth of goods compared to imports at $224 million (K164 billion), representing a deficit of $12 million (K9 billion).

Malawi is failing to utilise the Comesa market as compared to regional neighbours Zambia which raked in $873.8 million (10.9 percent), Egypt $1.75 bilion (21.9 percent) and Kenya $1.5 billion (18.9 percent).

Malawi is only ahead of Zimbabwe at $ 89.0 million (1.1 percent), Comoros $7.4 million (0.0 percent) and Eritrea $3.0 million (0.0 percent), according to the report.

This dismal performance is against the backdrop of  the country implementing a number of policies and strategies, including the private sector strategy, National Investment Policy, National Export Strategy (NES) and an updated micro small and medium enterprise (MSME) policy to ramp up exports.

In an interview on Tuesday, National Working Group on Trade Policy chairperson Frederick Changaya attributed the lucklustre performance to competitiveness of the country due to the high cost of doing business.

“The high cost of doing business reduces competitiveness of local products on the international market, which leaves other economies to take advantage of the situation.

“Malawi needs to work on enablers to doing business if this situation is to be addressed. It will take a lot to achieve this, but it is not a lost war yet. A lot of work needs to be done to make sure we are selling out there otherwise we will never sail,” he said.

In an earlier interview, Comesa secretary general SindisoNgwenya said Malawi’s overreliance on tea and tobacco as main export commodities has not only affected the country’s trade performance, but also its share of trade in the trade bloc.

He said: “For quite some time now, the emphasis has been on traditional crops such as tea and tobacco, but yet when we talk about industrialisation, we talk about the value chain.”

Ministry of Industry, Trade and Tourism spokesperson WiskesNkombezi earlier said there is need to tame the huge appetite for imports that are domestically found and concentrate on import substitution.

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