Malawi’s declining tobacco, tea, coffee and cotton earnings and output are raising concerns and prompting calls for export diversification and investment in alternative sectors.
Meanwhile, Malawi has recorded a drop in production and income from cotton, coffee, tea and tobacco, the country’s main foreign exchange earner, compared to last year in the corresponding period.
University of Malawi economics lecturer Edward Leman said in an interview on Wednesday that the decline is a warning to authorities to explore and diversify to more export opportunities.
He said: “The best approach is to diversify exports and balance the export base so that its not largely dependent on the agricultural sector.
“We need to quickly explore our competitive advantage so that we support the export with balanced sector contributions.”
Leman warned that if the exports do not improve the country will continue to face declining reserves, volatility exchange rate, unbalanced balance of payments and imported inflation.
Lilongwe University of Agriculture and Natural Resources Centre for Agriculture and Research Development director Innocent Phangaphanga said the drop entails that it is a high time that Malawi sought alternative crops that complement the existing ones.
He urged government to invest more in other sectors that have potential to bring Forex to the country.
Phangaphanga emphasised that any drop in earning from the key export crops, especially tobacco, indicates a negative impact to the country.
He said: “Malawi relies heavily on these crops, and a decline in their performance not only affects the economy but also has consequences for other social needs.
“In Malawi, a lot of imports depend on agricultural products, particularly tobacco. Therefore, even a small decline in tobacco performance can have serious consequences for the country.”
He also attributed that if the drop will continue, Malawi will face challenges in procuring other products such as fertiliser, medicine and fuel that require foreign exchange to purchase.
This year cotton income dropped to K6.3 billion from K7.8 billion last year, representing 19 percent drop. Tobacco has earned $282.4 million (about K494.4 billion) from $517 million (about K905.2 billion) last year, a 43 percent below last year in the corresponding period.
Domestic coffee opening prices, on the other hand, have dropped to K16 000 per kilogramme (kg) from about K21 000 per kg last year in the corresponding period, indicating 24 percent drop.
Tea production has fallen to 29.44 million kg in the first-half of this year from 31.48 million kg during the corresponding period last year.
