New trade policies key to boosting exports—group

National Working Group on Trade and Policy says Malawi needs economic policies and instruments to help improve the country’s export base.

In a written response on Monday, the group’s chairperson Frederick Changaya said that while the economy imports more value-added goods and services, it exports commodities and cheap labour, a situation which continues to widen the trade gap.

He said this in the context of a report by the World Trade Organisation (WTO), which shows that Malawi’s exports declined by $642 million (about 528 billion) from $1.43 billion (about K1.18 trillion) in 2011 to $788 million (about K649 billion) in 2020.

During the same period, trade balance widened to $1.88 billion (about K1.55 trillion) in 2020.

Changaya said: “We need economic policies and policy instruments which would diversify the Malawi economy away from rain-fed agriculture into economic activities that have increasing returns, rising wage rates and growing output.

“We see Malawi doing the same things hoping for poverty alleviation, which has eluded us since time immemorial. The policies should further integrate the village economy into national economy by providing seamless linkages with urban economy.”

In its recent submission to Ministry of Finance as part of budget input, Malawi Confederation of Chambers of Commerce and Industry observed that trade continues to be undermined due to the country’s slowness to adopt digital technology in its trade and commerce procedures.

“Digitisation is no longer an option and Malawi should prepare itself to develop or adapt to digital infrastructure to support business development in Malawi,” reads the input.

To boost exports, the Ministry of Trade is banking on the National Export Strategy II for a turnaround and the commencement of trading under African Continental Free Trade Agreement, which will cover a market of 1.2 billion people and estimated $3 trillion in combined gross domestic product, to boost exports through the expanded market.

Malawi’s main export crop is tobacco, which rakes in about 60 percent of the country’s forex earnings.