Malawi excessive imports to suppress 2014 growth
Malawi’s insatiable appetite for imports will suppress economic growth this year, with gross domestic product (GDP) forecast being dragged by about 0.6 percent, according to the World Bank.
The World Bank in the June 2014 Global Economic Prospects noted that this year’s exports will grow by 4.8 percent while imports will jump by six percent, consequently reducing economic growth.
Malawi’s GDP is projected to grow by 4.4 percent this year after growing by 4.2 percent last year, according to the World Bank.
According to the bank’s estimates, last year’s exports grew by 11 percent while imports fell by about one percent with the net contributing about 3.6 percent to GDP growth.
The bank has further indicated that net exports will reduce economic growth by 0.4 percent in 2015 with exports jumping by 5.1 percent while imports are projected to rise by 5.8 percent.
However, the Malawi Government has indicated commitment to increasing exports through a number of policy reforms and programmes.
In his first State of the Nation Address last Tuesday, President Peter Mutharika reiterated government’s commitment to supporting exports.
He said government will continue to implement the National Export Strategy (NES) launched in December 2012 to run up to 2018.
“In addition, the government will facilitate the promotion of quality in local products and promote the Best-Buy-Malawian campaign; empower Malawians to venture into tangible businesses through deliberate economic empowerment strategies; support Malawians to enter into joint ventures with foreign investors,” said Mutharika.
The President said government will strengthen the capacity of the “one-stop” investment centre to promote and encourage increased investment in the productive sectors especially in agriculture, mining, manufacturing and tourism.
Currently, there is the Malawi Investment and Trade Centre (Mitc), which was formed after merging the Malawi Investment Promotion Agency (Mipa) and the Malawi Export Promotional Council (Mepc).
Faced with chronic trade negative imbalances, Malawi’s 2013 total trade—imports and exports combined—dropped by about 1.5 percent compared to the previous year, according to the United Nations Conference on Trade and Development (Unctad).
Unctad said in 2013, exports dropped to $1.15 billion from $1.18 billion the year before while imports dropped slightly from $2.72 billion to $2.7 billion.
Against the background of ballooning imports relative to exports, the government launched the NES which focuses on three export-oriented clusters for diversification: oil seeds products, sugar cane and manufactures.
