Malawi-India trade deficit widens to K40bn
Malawi’s trade deficit with India almost doubled to K40.46 billion ($119 million) in 2011 from K23.46 billion ($69 million) in 2010 in favour of New Delhi, a World Trade Organisation (WTO) report shows.
The report titled India-Africa: South-South Trade and Investment for Development, indicates that in 2011, Malawi exported goods worth K6.8 billion ($20 million) to India and imported commodities worth K47.26 billion ($139 million) from the sub continent. The report further reveals that in 2010, Malawi imported K31.28 billion ($92 million) and exported K7.8 billion ($23 million).
This revelation means that Malawi must implement policies to match imports by attracting investment, and exporting more to earn foreign exchange and create employment according to analysts.
Ministry of Industry and Trade spokesperson Wiskes Nkombezi, in an interview on Thursday said Malawi Government is implementing policies to increase the country’s exports.
“There is no specific policy that is targeting India’s trade deficit, however, the country is implementing the National Export Strategy [NES]. The NES prioritises the production of legumes which are earmarked for the Far East including India, Pakistan and China. We also hold investment and business forums intended to find markets for our products and attract investors,” said Nkombezi.
Food Certification Consulting managing director and Malawi Fair Trade Network board member Doreen Chanje, in a telephone interview on Thursday, said the country must ensure that it meets required standards to export more.
“Markets have different specifications on product quality. Malawi’s major problem is to meet sanitary standards on farm produce such as legumes. There have been instances where our groundnuts have been returned because they did not meet required standards. To satisfy standards the process must start from farms through good farming practices, including planting of quality seeds, harvesting and storage,” said Chanje.
Malawi’s top exports are tobacco, uranium, tea, legumes and cotton, while its major imports are fertilisers, medical drugs and fuel, according to a recent National Statistical Office trade brief.
Generally, Malawi suffers a trade deficit. In 2013 the country’s overall trade deficit is projected to stand at K166.6 billion ($490.1million) according to the International Monetary Fund Malawi country report published in May.
Among other initiatives to boost exports government is implementing the Presidential Initiative for Poverty and Hunger Reduction (PIPHR), under which about 2 000 metric tonnes of soya beans seeds was distributed to 100 000 farmers. The Initiative expects to realise over 40 000 metric tonnes of soya this year and has partnered Admarc and Auction Holdings Exchange Commodity Company.
The India-Africa report notes that in 2011, India initiated the Cotton Technical Assistance Programme for Africa aimed at strengthening the value chain of the cotton sector, including in Malawi, through transfer of technology, post-harvest practices, enhancing downstream competence and capacity building of various stakeholders.
