UN tips Malawi on export potential
The United Nations Conference on Trade and Development (Unctad) says Malawi has an opportunity to explore other commodities to diversify its export base, which could boost exports by 35 percent.
In the 2022 Catalogue for Diversified Export Opportunities published on Tuesday, Unctad said Malawi has consistently performed poorly on export diversification, which has remained minimal and concentrated on a few agro-products.
But the UN trade agency says Malawi has about 3 956 potential products which it could be focusing on, including machinery, electrical and electronic appliances, plastics, organic chemicals and iron and steel.
The catalogue, the first issue of the Unctad aimed at informing governments and private sector about possible product areas to diversify economies for structural transformation, has indicated that Malawi has market potential in countries such as United States of America, France, China, Germany and India.
In a statement accompanying the publication, Unctad director for technology and logistics division Shamika Sirimanne is quoted as having said Malawi needs to diversify its economic activity towards more complex products on top of traditional products and develop policies to facilitate this process.
The Unctad data comes at a time Malawi’s export basket continues to be dominated by agricultural products, with tobacco alone constituting about 40 percent of total exports while sugar and coffee have 10 percent share of total exports.
The 2022 Malawi Government Annual Economic Report shows that the country’s exports stood at $1.56 billion (about K1.61 trillion) last year from $773 million (about K797 billion ) recorded in 2020, with exports of tobacco, tea and sugar growing by 20 percent, 27 percent and 37.8 percent in that order.
Unctad said Malawi, an agro-based economy, needs to consider agro products such as eggs, honey, edible animal products, edible fruit, nuts, meat and edible meat offals, among others, which have higher export opportunities beyond Malawi borders and are in abundance.
Reacting to the report, National Working Group on Trade Policy chairperson Fredrick Changaya said on Tuesday that Malawi has the potential to expand its export products, but this will require a complete overhaul in the way things are done.
He said: “That Malawi needs to expand its export base is common knowledge shared by most stakeholders, but what we need to understand is that this is not possible if we move away from the usual way of doing things.
“For instance, we could instead of exporting raw cassava export starch extracted from the cassava and seize importation of the same for various uses to do away with starch imports.”
Changaya said for meaningful economic growth and diversification, the country needs to understand that there is no growth in commodities, adding that the country cannot grow by simply relying on primary products such as maize but through value chains.
Meanwhile, Ministry of Trade and Industry is banking on the National Export Strategy II as well as the commencement of trading under African Continental Free Trade agreement, which is a market of 1.2 billion people with an estimated $3 trillion in combined gross domestic product, to enhance its exports.
Tobacco still remains Malawi main export crop, bringing in about 60 percent of the country’s export earnings.
