Malawi exports are projected to rise in 2013 backed by the expected strong tobacco output this year and growth in uranium exports, Nico Asset Managers Limited has said.
The investment management and advisory firm has since expressed hope that a likely growth in a larger export base would help support the value of the kwacha and lower the pace of depreciation as demand for foreign exchange eases.
“Exports are forecast to rise in 2013 as tobacco production recovers following a sharp decline in 2012 and prices remain buoyant. The increase will also be supported by growth in uranium exports as production is optimised at the Kayelekera mine in the Northern Region,” said the firm in its monthly economic report for January 2013.
A likely jump in exports revenue this year as foreseen by the firm could help the country, dogged by recurring yawning trade gaps, generate more foreign exchange to meet its import demand, among others.
Minister of Industry and Trade Sosten Gwengwe said in an interview in Lilongwe on Friday that the projected rise in exports is in tandem with government exports strategy which, he said, will be key to double the country’s exports in the next five years.
“As far as exports are rising, forex becomes guaranteed in the banking sector and economic activity and production increase. So the rise in exports is good for increased productivity as production will be seamless,” he said.
According to Nico Asset Managers Limited, export growth will be robust in 2014 up to 2017 underpinned by favourable tobacco prices, strong uranium prices and a pick-up in the general economic activity.
Output at Kayelekera, rose from 998 tonnes in 2011 to around 1 298 tonnes in 2012 following a production optimisation on the site, raising hopes of corresponding increase in the revenue from the commodity on account of good prices on the international market.
Nico Asset Managers said a strong export growth would likely encourage domestic production and promote self-reliance among local farmers, which would help to stimulate the country’s economy.
“A larger export base will help in the inflow of forex which would later cushion the negative effects of the country’s economic downturn,” says the firm.
Malawi has, over the years, had a weak export base, a situation which has been affecting the value and stability of the kwacha against major international currencies.