ED was in Malawi not on holiday
Historically, Malawi has economically benefited more from Zimbabwe than vice-versa. The trend is likely to remain so for the unforeseeable future if the country plays its cards well.
This is the backdrop against which Zimbabwe President Emerson Dambudzo Mnangagwa (ED) was in the country on a three-day State visit at the invitation of President Lazarus Chakwera.
ED’s visit came at the end of a Joint Permanent Commission of Cooperation (JPCC) meeting between the two countries in Lilongwe on Tuesday.
Long before the two countries established the JPCC, Malawi was exporting labour to the mineral-rich country. One of the reasons for the establishment of the Federation of Rhodesia and Nyasaland in 1953 was to facilitate, formalise and expand Malawi’s labour export to the two Rhodesias, now Zimbabwe and Zambia. It is on record that in the mid-90s, four million or 30 percent of Zimbabwe’s population then were naturalised Malawians. ED acknowledged the huge population of Malawians naturalised as Zimbabweans during the State visit.
Growing up in rural Hoho in the 70s the name Harare sounded like heaven on earth. Harare, alongside Johannesburg and Cape Town, we were told, was a city of milk and honey that bestowed transformative economic fortunes on thousands of Malawian menfolk who trekked there. For boys, failing to go further with school therefore did not mean the end of their fortunes in life. Harare and Theba (in South Africa) were believed to do the magic on all who sought greener pastures.
Although Zimbabwe has over time lost most of its shine, it remains a far bigger economy than Malawi. In 2021, its gross domestic product (GDP) was $1 773.92 against Malawi’s $634.84.
There is no doubt that the land reform programme the Robert Mugabe administration embarked on in the 80s with the signing of the Lancaster House Agreement and the economic sanctions imposed on it greatly affected the country’s economy. Land reform was an effort to more equitably distribute land between black subsistence farmers and white Zimbabweans of European ancestry who had traditionally enjoyed superior political and economic status. The exercise has had a serious negative effect on the Zimbabwean economy and it is argued to have heavily contributed to its collapse in the 2000s.
There has been a drop in total farm output and exports of agricultural products. Overall, Malawi’s trade balance is structurally in deficit. In 2021, imports of goods reached $3.2 billion while the country exported goods for a value of $1 billion.
But with Zimbabwe, tables have turned with the country now exporting more to a country which was once a breadbasket for the whole Sadc region. Bilateral trade balance between the two countries has shifted in Malawi’s favour. During the last 26 years, for example, Zimbabwe’s exports to Malawi have decreased by an annualised rate of 9.17 percent from $50.4 million in 1995 to a paltry $4.13 million in 2021. Main exports to Malawi were iron and steel, electrical and electronic equipment, cereal, flour, starch and footwear.
Malawi’s exports to Zimbabwe during the same period have increased at an annualized rate of 5.01 percent, from $8.71 million in 1995 to $31.1 million in 2021 with raw tobacco, maize and soybean as the major exports.
Belgium (20.8percent), South Africa (6.2percent), the UK (6percent), Kenya (5.1percent), the United States (4.6 percent) and Zimbabwe (4.5percent), China (4.4percent), remain Malawi’s main trade partners, according to latest data by Comtrade. However, it is South Africa and Zimbabwe that Malawi has bilateral trade agreements.
With the two countries’ trade balance is already in favour of Malawi, the country can leverage it and make the most of it. But this calls for vision and good planning.
On the other hand, Zimbabwe is on a drive and trajectory to change things. The country which is forecasting to increase its exports to Malawi and the region as a whole could soon contract its trade balance with Malawi and turn the tables. I bet during the three days he was in the country ED was not a tourist on holiday.
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