Ministry of Trade and Industry and trade experts have differed on factors behind the surge in exports, which more than doubled in August, with the latter arguing it is a seasonal trend associated with tobacco sales.
This follows a National Statistical Office (NSO) International Merchandise Trade Statistics, which showed that exports increased by 120 percent in August to K321 billion from K146.55 billion in July. In August 2023, the exports were recorded at K137.99 billion, according to the report.
Reads the report in part: “Total exports increased significantly, reaching K321.99 billion in August 2024 from K137.99 billion in August 2023, which translates to a 133 percent rise.
“In August 2024, total imports increased to K549.65 billion from K344.07 billion in August 2023, representing a 60 percent increase.”
This means the export-to-import ratio was about 1 to 1.7 in August, indicating that for every unit of exports, there were 1.7 units of imports.
Trade experts say this is better than the cumulative ratio of 1 to 3.7 where total exports stands at K1.5 trillion and imports at K5.49 trillion, creating a deficit of K3.79 trillion as at end 2023, according to NSO data.
In an interview yesterday, Minister of Trade and Industry Sosten Gwengwe attributed the surge in exports to the National Export Strategy (NES II), which targets to boost the share of exports as percentage of gross domestic product to 20 percent by 2026.
He said: “Exports improved because most exporters are now exporting value-added products rather than raw commodities. Malawi Investment and Trade Centre has also been active in finding new markets for the country’s goods.”
Gwengwe said government is also enforcing the Control of Goods Act to encourage the Buy Malawi Strategy.
But in a separate interview yesterday, National Working Group on Trade Policy chairperson Fredrick Changaya described the exports surge in August as seasonal, attributing the feat to high tobacco exports, which amounted to 69 percent of the total exports.
He urged government to find ways of boosting exports as the trend shows the continued overreliance on tobacco.
Changaya, who is also Applecore Grain and Milling Limited managing director, said: “It is just a timing factor. Key is to diversify the economy into production of more robust goods and services such as those that we export every month and not seasonal as is the current case.”
Common Market for Eastern and Southern Africa Business Council president James Chimwaza, in an interview yesterday, attributed the worsening trade gap to various factors, including the volatile exchange rate and continued lack of production capacity.
“If you compare the Southern African Development Community and other regions, most countries, including Malawi, have not registered remarkable strides on improving capacity to produce products that are relevant for competitive exports,” he said.
NSO data shows that fertiliser led the imports at 8.8 percent followed by fuel at 8.3 percent, cereals at 5.8 percent, plastics at 5.4 percent, vehicles at 5.1 and pharmaceuticals at 4.7 percent.
On the other hand, exports were dominated by tobacco at 68.8 percent, followed by pulses at 15.4 percent, groundnuts at 3.7 percent, tea at 2.7 percent and sugar at 0.9 percent.
The NES II aspires to increase exports of ‘Made in Malawi’ goods to the regional and global markets and improve export readiness.
