Trade balance continues to worsen—MCCCI

The continued drop in the country’s trade balance has prompted the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) to look at addressing the issue through the 29th Malawi International Trade Fair to be held this end of the month.

Addressing journalists in Blantyre, MCCCI Chief Operating Officer, Chimwemwe Luhanga, said the negative trade balance is a result of low productivity in the country.

He said the chamber has hence come up with a theme, ‘Productivity – A source of export competitiveness,’ that aims to improve the situation.

“There is a lot that needs to be done to address the trade deficit that is there and the theme for this year’s trade fair is aimed at addressing the issue.

“Productivity seeks that you produce more at low cost and what we want to see is increased productivity that will see local companies being able to compete on both local and foreign markets,” Luhanga said, adding that, as a country, we really need to improve on productivity if we have to close the trade deficit.

Luhanga said the capacity of local firms to export is affected by a number of factors that include low utilisation of technology, lack of improvement in the business environment and associated high costs among others.

“The industry in Malawi is to a large extent import – dependent and therefore subject to high input cost. This year’s theme, therefore, raises the need to enhance productivity of firms and bring about action for Malawi to become a competitive exporter.

“Competition favours firms that are more productive, as they face low production costs with more output out from a unit input production, hence more productive firms’ market shares expand, while that of less productive firms contract. This is fundamental to attain countries export competitiveness in Malawi,” he said.

According to World Bank statistics, Malawi’s trade balance stood at $1 billion as of 2015.