Malawi’s trade with EU, US drops

Malawi’s trade with the European Union (EU) and United States relatively declined between 1996 and 2011, with exports and imports shifting towards Africa and developed Asia, a United Nations Conference on Trade and Development (Unctad) ha shown.

The Unctad economic development in Africa 2013 report, titled, ‘Intra Africa Trade: Unlocking Private Sector’, indicates that Malawi’s exports to the developed Europe averaged 46.3 percent between 1996 and 2000, but relatively declined to 34.2 percent of total exports between 2007 and 2011.

The report released on July 11 2013, further indicates that Malawi’s exports to developed America dropped from 14.1 percent to 10.6 percent in the review period.

Exports to Africa, according to the report, rose from 22.5 percent between 1996 and 2000 to 29.8 percent between 2007 and 2011, so did exports to developed Asia from 5.6 percent to 13.2 percent in the same period, indicating a shift of trade.

National Working Group on Trade Policy chairperson Geoff Mkandawire said yesterday although Europe and America are lucrative in terms of prices, the markets have their own bottlenecks.

“Traders from Malawi experience logistical bottlenecks when transporting goods to Europe and America,” he said.

Earlier this year, Minister of Industry and Trade Sosten Gwengwe argued that intra-regional trade makes more economic sense to Malawi and encouraged the removal of non-tariff barriers among members for seamless trade.

He argued that although the European and American markets are lucrative to the country, Malawi traders face higher costs and experience more logistical bottlenecks to access them.

However, the Unctad report adds that imports from Africa declined from 66.7 percent (1996-2000) to 55.9 percent (2007-2011), developed Europe declined from 15.2 to 14.9, developed America rose from 3.2 percent to 4.1 percent, while importsd doubled  from developed Asia more than from 10 percent to 22.3 percent in the same period.

The report adds that in the period from 2007 to 2011, 11 African countries including Malawi imported at least 40 percent of their goods from Africa.

However, it adds that Malawi is the only country that exported maize between 2007 and 2011, while vegetables were only exported by Eritrea, Ethiopia, the Niger and Somalia.

Unctad indicates that Malawi is a net exporter of agriculture and food items and the report shows that the country enjoyed a surplus trade balance of $26.4 million (K9 billion) in agriculture raw materials and $593.51 million (K201.7 billion) in all food items.

The report further indicates  that between 2007 and 2011, Malawi exported 31.1 percent of its exports to Africa which included—unmanufactured and refuse tobacco and unmilled maize—to Africa.

In the same period, the country exported 75.3 percent—unmanufactured and refuse tobacco,   sugar, molasses and honey—to the rest of the world between 2007 and 2011.