Merchandise exports still low—economist
Exports of merchandise—goods for personal use or wares—raked in K659.7 million in the 2015/16 fiscal year, a 9.6 percent jump from the previous year’s K601.6 million, according to a government report.
But Ben Kaluwa, an economics professor at University of Malawi’s Chancellor College, said on Wednesday this is too little and called for the improvement of the country’s manufacturing sector, like Japan which managed to jump-start its economy by producing electronic products.
He said: “We are not moving as a country because we continue to depend on agricultural products, which in most cases, we export them in raw form.
“When we export agricultural products in raw form, we are not only exporting the commodities but even jobs as well. The 9.6 percent is nothing if we were producing other items, including electronics and other high value items.”
According to Kaluwa, industries must strive to be innovative and start producing goods that were being manufactured in the 1970s and 1980s.
He said: “If you remember, we were exporting buses to Zimbabwe and the economy was benefiting from this. We need to improve our manufacturing base because the way things are, depending on agriculture, we are not moving forward.
“If we can generate $2 billion [K1.4 trillion] in a year through exports, that is something worth celebrating.”
In a separate interview, Treasury spokesperson Nations Msowoya agreed with Kaluwa, saying the country can do better if it increases its merchandise for exports.
“As a country, supply-related constraints are many. If we can deal with the challenges that we are currently facing and remove all the impediments, we can manage to raise more foreign exchange,” he said.
Msowoya said the country also needs to establish what major markets are looking for because it can help to produce products whose markets are already there.
The Malawi Government Annual Economic Report 2016 shows that while merchandise exports are going up, total merchandise imports are declining.
According to the report, the increase in exports could not keep pace with imports since the latter are mostly dominated by traditional products such as fertiliser, petroleum and other fuels.
Data from National Statistical Office (NSO) indicate that the country registered a trade deficit of K433 million in 2015, a drop from K596.2 million the year before.
