Malawi is vying in the category of least developed countries within the sub-Saharan region that export to Europe to be directly affected by economic volatility there.
This is contained in a recent World Bank Global Economic Prospects report.
The other countries are Ethiopia and Madagascar.
According to the report, a sharp contraction of growth in the euro area could hurt exporters of agricultural products such as coffee tea tobacco, cotton and textiles.
“A faster-than-expected deceleration of the global economy and increased volatility of commodity prices could hurt many commodity exporters,” says the Bretton Woods institution in the report.
Malawi exports tobacco, coffee, tea and sugar, among other commodities, to European countries.
Recent data from United Nations Com-trade show that European Union imports from Malawi stood at $253.7 million in 2021.
Meanwhile, the World Bank has also warned that higher prices for farming inputs—such as fertiliser—and fuel would also prolong food price pressure in the country.
“Russia’s invasion of Ukraine has already amplified existing supply constraints in in global fertiliser markets. Costlier farming inputs could reduce productivity in agriculture and further deepen food shortages,” the World Bank says.
It says higher fertiliser prices could, then, worsen fiscal pressure across the region, given that, in many countries, government spending on subsidised fertilisers accounts for a larger portion of spending on agriculture.
In the 2022-23 National Budget, about 85 percent (K109.5 billion) of the agriculture sector budget was allocated to the Affordable Inputs Programme.
This is a K33 billion decline from the previous year’s K142 billion allocation.