By Kingsley Jassi:
Malawians consumed imported breakfast cereals worth $95.2 million in 2024 alone, making them one of the top forex draining items on the country’s trade profile.
Apart from fuel, fertiliser, electronics and vehicles that Malawi has little or no capacity to produce, cereals are made from maize, the country’s main crop.
The $95.2 million is about 10 percent of Malawi’s total exports value in the year, estimated at $946 million, as imports were more than three times—at $3.2 billion.
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The cereals imports figure was compiled from monthly economic reviews by the Reserve Bank of Malawi (RBM).
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RBM spokesperson Boston Maliketi Banda expressed worry that these are products Malawi should be producing.
However, Banda disclosed that efforts were underway to ensure that companies with production potential for import substitution and exports are supported as a way of addressing the worsening balance of trade.
“The Minister of Industry and Trade [Vitumbiko Mumba] has been quick to submit a list of companies that can produce for either import substitution or export. This week, we should be supporting the first lot with not less than $10 million,” Banda said.
He could not provide details on the first lot to be supported but further said the central bank was working with commercial banks to soften their terms of lending for production-oriented ventures.
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“It is even surprising how the banks have responded, so far. The collaboration is encouraging and we are hopeful that things will improve very soon,” he said.
In an earlier interview, trade expert Fredrick Changaya said the country should reduce the emphasis on low-value commodity exports and focus on value addition of the commodities to ensure import substitution and export.
In the budget statement presented to Parliament two weeks ago, Finance Minister Simplex Chithyola Banda said the government would restrict the importation of goods that can be produced in Malawi while supporting potential and existing manufacturers in trying to diversify their export base.
“Government has also embarked on discussions with international investors in Malawi and all big companies to develop backward linkages with our SMEs [small and medium enterprises] sector for their raw materials and inputs requirement, thereby creating offtake markets to our SMEs and preserving the much needed forex,” the minister said.
Malawi’s trade profile continues to deteriorate, with exports of goods worth below a billion dollars while imports are surging above $3 billion, creating pressure on forex availability.
In 2024, the goods balance deteriorated by 4.9 percent, with the deficit widening from $2.2 billion in 2023 to $2.3 billion in 2024.
According to the annual economic report, this was primarily driven by a 2.8 percent increase in goods imports, which rose from $3.1 billion in 2023 to $3.2 billion in 2024, coupled with a 1.9 percent decline in goods exports, from $965 million to $946 million.
