Malawi-Sadc trade balance rising on weak exports

Malawi is importing more than it is exporting within the Southern Africa Development Community (Sadc) region, widening its trade balance, National Statistical Office (NSO) figures show.

The Malawi and Sadc trade profile contained in the NSO’s 2022 Malawi in Figures Report shows that athough the country’s exports to 10 Sadc member States hasve risen over the three-year period, imports from Sadc member States to Malawi are higher than the exports.

According to the data, Malawi imports from Sadc member States have risen from K139.3 billion in 2019 to K178 .33 billion in 2021 while exports have increased from K546.03 billion in 2019 to K668.33 billion in 2021.

Consequently, Malawi’s trade balance with the Sadc member States rose from K405.98 billion in 2019 to K490.10 billion in 2021.

The data shows that agro-products such as tobacco, tea, sugar, coffee and groundnuts remain the key export products for Malawi.

In an interview, National Working Group on Trade and Policy president Frederick Changaya observed that Malawi needs to replace traditional exports of produce with high-value added products to penetrate and make the most of existing markets.

He said: “We export cheap produce and import high-value commodities. Malawi needs to help factories to grow to a level where we can substitute imports.

“Further, Malawi needs black participation in that industrialisation drive. No country develops when its people are excluded from value-added goods production. So, you will see that though it appears far away, development and deficit reduction would take a few policy instruments and a few support actions.”

According to the NSO figures during the review period, the country’s main imports from Sadc member States were unused postage stamps, unmanufactured tobacco, cement and detergents.

On the other hand, unmanufactured tobacco, oil cake, groundnuts, sugar and tea topped the exports list.

In terms of total trade, South Africa was Malawi’s main trading partner, accounting for 60 percent of Malawi’s total trade with Sadc member states.

Ministry of Trade spokesperson Mayeso Msokera is on record as having said Malawi continues to build the export readiness of Malawian exporters, grow the number of products being exported, especially those that can favourably compete with exports on the domestic market to compete favourably within the region in terms of trade.

“The country also aims to develop regional and global value chains, promote entrepreneurship with emphasis on the small and medium enterprises and women and youth entrepreneurs and address critical enablers and cross-cutting issues related to exports,” he said.