Malawi’s trade in COMESA falls
Malawi’s trade with the 21-member Common Market for Eastern and Southern Africa (Comesa) is falling, a situation attributed to lack of efficacy of the fiscal and monetary policies to drive export growth.
Published Comesa data shows that in 2023, out of $187.4 billion (about K328 trillion) worth of goods traded in the trade bloc, Malawi’s share of exports was only $966 million (about K1.6 trillion) compared to imports at $3.1 billion (about K5.4 trillion).
On the intra-Comesa front, out of the $14.1 billion (about K24 trillion) worth of exports, Malawi’s share stood at $161 million (about K281 billion) while its imports were double, at $247 million (K432 billion), according to the data.
In a statement, Comesa assistant secretary-general Mohamed Kadah cited lack of effective product diversification and existence of non-tariff barriers (NTBs) in the region as some of the key challenges to intra-regional trade.
He said: “Trade liberalisation alone cannot deliver anticipated benefits to all member States equally.
“There are bound to be winners and losers in the trading arena.”
National Working Group on Trade Policy chairperson Frederick Changaya, in an interview yesterday, said the country’s performance in Comesa signifies failed trade as volumes recorded are below the demanded five percent average.
He observed that with Malawi having a one percent land mass and four percent of Comesa’s population, the country’s share of trade is failing at 0.0005 percent.
Changaya, who is also Applecore Grain and Milling Limited managing director, said: “Malawi is failing because the issues are cross-cutting from a legacy of wrong decisions and policies and policy mix for decades to technical limitations such as land mass, leading to even a loss of domestic market.
“We have said it over the years that our trade, fiscal and monetary policies are lacking the efficacy required to drive the growth of exports at a rate faster than population and imports.”
Under the Comesa Treaty, all goods may be traded among member States under preferential treatment if they satisfy the prescribed rules of origin.
Other than Comesa, Malawi is also a member of the World Trade Organisation and Southern African Development Community (Sadc). It also has bilateral trade agreements with China, South Africa, Zimbabwe, Mozambique and Botswana.
At the regional level, Malawi also participates in the Comesa-Sadc-East African Community Tripartite Free Trade Area negotiations.
As a least developed country (LDC), Malawi also benefits from development focused pro-LDC trade agreements such as the European Union’s Everything but Arms and the US-African Growth and Opportunity Act.
At the continent level, Malawi signed the African Continental Free Trade Area, a market of 1.3 billion people and a gross domestic product of $3.4 trillion.
Cross-border Traders Association of Malawi president Steve Yohane admitted that most Malawian traders are losing out on trade despite the preferential trade regimes provisions due to the NTBs.
Meanwhile, Comesa is implementing Trade Remedies Regulations, aimed at recommending measures to prevent potential losses that its member States might incur due to unfair trading practices.
