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Initiative to narrow trade deficit by 25%

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Malawi is projected to reduce its trade deficit by 25 percent and build a resilient global trade network by 2026 under the €1 million [about K942.2 million] Programme Support to the African Continental Free Trade Area (AfCFTA) project.

The project is being implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), a German development agency which provides services in the field of international development cooperation and international education work.

Among other things, the project aims to strengthen AfCFTA steering structures for facilitated negotiation process and enhanced framework conditions for implementation of commitments.

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It targets improved private sector and civil society involvement in the AfCFTA negotiation and implementation process.

A factsheet for the Malawi project released by GIZ recently indicates that it will be supporting the negotiations and national implementation efforts.

“The agenda seeks to address the key constraints and challenges of intra-African trade while significantly increasing the volume and benefits of trade for sustainable economic growth and development,” the factsheet reads.

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Ministry of Trade spokesperson Mayeso Msokera said implementation of the AfCFTA in Malawi commenced and exports are gradually picking up owing to the easing of Covid restrictive measures.

He said recently the government facilitated exports of products such as maize flour, rice, sugar and beans under the AfCFTA to countries such as South Sudan.

“The ministry is positioning and promoting more sustainable exports that can command higher prices on the continental market,” Msokera said.

Malawi continues to be faced with a widening trade balance owing to its huge appetite for imports against a low production and value addition base.

For example, in 2019, Malawi goods exports into Africa were estimated at $331 million and imports were valued at $802 million with a goods trade balance of $471 million.

Total exports of goods to the world in 2019 were $912 million, and exports of services stood at $179,000. On the other hand, imports of goods were $2.9 billion and those of services $335,000, representing a goods trade deficit of $2.1 billion.

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