Malawi’s agribusiness blossoms
Exports of agricultural products grew in April, offering an encouraging counterpoint to the widening trade deficit, data from the Reserve Bank of Malawi (RBM) show.
In its May 2024 issue of the monthly economic review, the Central Bank reported the merchandise trade deficit for the review month stood at $238.5 million (about K417.7 billion) from minus $181.8 million (K318.4 billion) in April 2024, and minus $207.6 million (about K215.3 billion) in the corresponding month of 2023.
The widening deficit in May was driven by a wider growth in imports (29.8 percent) than an increase in exports (21.6 percent). As a result, exports were a paltry 10.7 percent of total imports in the period under review.
The report reads: “Total exports of goods grew to $37.7 million [K65.9 billion] from US$31.0 million (K54.2 billion) logged in the previous month and compared to $63.0 million (K65.1 billion) posted in May 2023.”
Meanwhile, imports of commodities rose to $276.2 million (K483.6 billion) in May from $212.8 million (K372.6 billion) recorded in April 2024 and $270.6 million (K280.4 billion) registered in May 2023.
Collectively, Malawi has accrued a deficit of $927.6 million from January to May 2024, a marginal improvement from a deficit of $964.8 million recorded over the same period in 2023 and $445.9 million deficit recorded in 2022.
However, this concerning trend is countered by a surge in exports of key agricultural products, showcasing the potential of Malawi’s agribusiness sector.
Non-traditional exports like macadamia nuts, tea, cotton, skins and hides are leading the charge, experiencing a combined increase of 21.6 percent or $6.7 million (about K5.5 billion) compared to April 2024.
This positive trend starkly contrasts the decline of Malawi’s traditional export leader, tobacco. Tobacco exports significantly dropped, falling from $7.0 million (K12.2 billion) in April to just $2.0 million (K3.4 billion) in May.
Mzuzu University agricultural economist Christopher Mbukwa said the increase in exports of non-traditional exports is a result of incessant calls from the public to boost sales, the growing demand for the products on the international market and government interventions through the Malawi Investment and Trade Centre.
H e , t h u s , u r g e d t h e government to provide technical support to local producers of the non-traditional value chains to increase productivity to maintain the positive trend.
“The reformed Admarc [Agriculture Development and Marketing Corporation] should quickly take up the call of buying these commodities to secure international markets,” said Mbukwa. “There is also a need for government throughout Malawi Investment and Trade Centre to facilitate and develop the capacity of businesses to export these commodities.”
In an earlier interview, Secretary to the Treasury Betchani Tchereni hailed the partnership between international organisations and local firms, saying: “If we add value and minimise damage because of mechanisation, we will get more in terms of export earnings and tax revenues.”
He said that after the I n t e r n a t i o n a l Fi n a n c e Corporation (IFC), a private sector investment arm of the World Bank, signed an agreement with Signature Investment to boost the production of macadamia nuts in the country.
