Low exports bother fund
Malawi continues to register unsatisfactory progress in its quest to weden production capacity for improved export, the Export Development Fund (EDF) has said.
The fund, owned by the Reserve Bank of Malawi (RBM) says more needs to be done if Malawi is to attain its aspiration of becoming a predominantly producing and exporting country in line with the National Export Strategy.
EDF acting Managing Director Fredrick Chanza said this on the sidelines of the industrial parks construction site tour by officials from the Ministry of Trade and Industry and Afreximbank.
“This is why we are working with agencies to make sure that, within the next two years, projects that aim at improving exports should be up and running and that will solve a lot of our problems including foreign exchange shortages,” he said.
Minister of Trade and Industry Simplex Chithyola lamented the widening trade gap in favour of imports.
“The government is committed to ensuring that projects such as industrial parks materialise so that we are able to produce what we consume and export more on top of creating jobs for our population,” Chithyola said.
Figures from RBM show that Malawi’s export earnings stand at $1 billion a year against an import bill of $3 billion.
In 2020, EDF launched seven projects worth K140 billion and guarantees which aimed at developing non-traditional exports in the country.
The projects were the Project Preparation Facility, Covid Trade Mitigation Facility Contract Farming and Export Agriculture Facility (ConFarm), Construction and Export Manufacturing Guarantee and Refinancing Facility (CoNEM), Hotel Construction Guarantee and Refinancing Facility, Export Packing Credit Facility, Venture Capital Facility (VCF).
On December 16 2021, Malawi launched the second National Export Strategy (Nes II) which seeks to boost the contribution of exports to the gross domestic product (GDP) from the current 14.6 percent to 20 percent by 2026.
The strategy has four goals, the first of which is to make Malawi a producer of competitive products that are in demand in the region and beyond. The second goal is to make Malawi compliant with regional and international standards of production.
The third goal is to make Malawi a diversified economy.
Launching Nes II, President Lazarus Chakwera said Malawi needs to identify products that can adequately complement tobacco exports, as well as remove the bottlenecks bedeviling the private sector’s capacity to diversify her exports.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.