Imports 92% more expensive—report
Malawi’s terms of trade have deteriorated, with imported commodities now 92 percent more expensive and exports only appreciating by four percent in 2021, published World Bank data shows.
In its 2022 Malawi Economic Monitor launched last week, the bank said commodity prices have continued to rise in 2022, with the import price index at 80 percent above 2021 levels by end-April 2022 due to the escalating Ukraine crisis.
Reads the report in part: “Despite rising global prices, 2021 fertiliser imports volumes remained largely stable while fuel imports volumes only started decreasing in late 2021 as buyers were temporarily shielded from global price dynamics through price controls.”
The development is coming at a time government is promoting import substitution through the Buy Malawi Strategy and the National Export Strategy (NES) II.
In an interview, National Working Group on Trade and Policy chairperson Frederick Changaya said while there are positive outcomes with the initiative, there are moderating variables that mask some gains.
He said: “The tragedy is where something like this is taken to be failing; hence, policy reversal oscillating back and forth.” To boost exports, the Ministry of Trade and Industry is banking on NES II and the commencement of trading under African Continental Free Trade Agreement, which will cover a market of 1.2 billion people and an estimated $3 trillion in combined gross domestic product, to boost exports through the expanded market.
