MCCCI says industrialisation key to reducing trade deficit

 

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said unless Malawi needs to produce and trade in goods that have gone through value addition to reduce trade deficit.

MCCCI head of communication Millie Kasunda made the remarks in an interview on Thursday ahead of the 30th Malawi International Trade Fair scheduled for May 24 to June 3 2018 at the Chichiri Trade Fair Grounds in Blantyre under the theme Industrialisation: Basis for Trade Competitiveness.

She said the theme was been considered to reflect the need for the Malawi economy to produce and trade in goods of value addition, a scenario that is possible through industrialisation which she said is fundamental to attaining trade competitiveness.

“As you are aware, Malawi is, to a large extent, import dependent and, therefore, due to the balance of payments deficit, subject to high input costs rendering our products uncompetitive on the international market.

“In the absence of significant value-adding activities, Malawi will invariably continue to be reduced to a net exporter of jobs to the rest of the world. This year’s theme thus focuses on the need to adopt a more export–oriented industrialisation as basis for achieving trade competitiveness. It calls for trade and economic policies that speed up the industrialisation process to propel exportation of high value processed goods,” she said.

The development comes in the wake of revelation from the International Trade Centre (ITC) observing that Malawi is yet to exploit her significant untapped export potential across diverse products, estimated at $333.5 million (about K246 billion), a situation that is contributing factor towards the country’s worsening trade performance.

Nevertheless, realising these opportunities for export growth requires timely, robust and targeted market analysis.

Malawi’s trade pattern reveals a widening trade deficit with figures showing that between 2009 and 2016, exports and imports increased by 159 percent and 245 percent, respectively, according to Mational Statistical Office (NSO).

Ministry of Industry, Trade and Tourism principal trade officer – technical Diamond Chikhasu earlier said while Malawian exporters are able to benefit from preferential market access to a number of developed and developing country markets, the challenge has been inadequate productive capacity to take full advantage of these opportunities by producing goods and services of the right quantity and quality.

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