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Export earnings hit K301 billion in first half

Experts push for import substitution

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Bernard Mphepo

Malawi realised K301.8 billion from all exports in the six-month period ending June 2022, figures from the National Statistical Office (NSO) show.

However, the earnings are six percent lower than the K321.3 billion recorded at the same time last year.

The figures show that export earnings were constantly declining in the first quarter of 2022, from K63.6 billion in January, K49.6 billion in February and K33.6 billion in March.

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The trend changed in the second quarter, with a constant rise in export earnings after recording K37.9 billion in April, K39.6 billion in May and K77.5 billion in June.

Director for Centre for Research and Consultancy Milward Tobias said the decline in export earnings in Kwacha value at a time the local currency is weaker now than in 2021 means the dollar value declined even more.

“What it means is that we have either exported less in the first half of this year or international prices are lower than last year. We need to scale up the export diversification drive,” Tobias said.

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Centre for Social Concern (CfSC) Programmes Officer for Economic Governance Bernard Mphepo said a drop in exports entails a reduced level of output, which is not ideal for the economy.

He then called on the government to consider simplifying regulations related to exports as a step towards broadening the scope.

According to Mphepo, there is a need for improved information collection and dissemination about foreign markets and requirements for exporting.

“Actions in this category should also consider product standards and other technical requirements imposed for exporting to developed country markets

“The availability of short and long-term credit is crucial to exporters. This is decisive for small and medium enterprises (SMEs), for which the credit constraints are more binding than for large firms. Since SMEs make up the large majority of firms in developing countries, improvements in this domain are necessary to favour export growth,” Mphepo said.

This is coming at a time the country is grappling with foreign exchange shortages that have affected businesses operations in the country.

However, in its June Monthly Economic Review, the Reserve Bank of Malawi said  total foreign exchange reserves increased to $817.3 million (about 3.3 months of imports) as at end June 2022 from $789.4 million (3.2 months of imports) recorded in the preceding month and $813.3 million (3.3 months of imports) at the end of June 2021.

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