Malawi exports in 2016 totaled $1.36 billion compared to imports of $2.33 billion, creating a trade deficit of $97 million, figures from the Reserve Bank of Malawi (RBM) indicate.
This implies that Malawi remains a predominantly importing nation, against its rhetoric to shift to a producing and exporting country.
In its 2016 Economic Report, advisory firm, Nico Asset Managers says the low export volumes in the year under review were due to the poor performance of the tobacco season which led to the reduced inflows of foreign currency.
In the 2016 tobacco marketing season, revenues totaled $276.39 million from the previous year’s $337.40 million, representing an 18 percent decrease.
But in a recent interview, Head of Business Administration at the University of Malawi’s the Polytechnic, Fredrick Banda, faulted the continued wide trade gap on “policy inconsistencies.”
“There is no good will from the policy markers. Only if we are serious with our policies, then we can penetrate the international market.
“We want to turn the economy from an importing and consuming nation to a producing and exporting nation but little is done on the ground,” said Banda.
He emphasised the need for the country to shift towards industrialisation and manufacturing, rather than focusing on exporting primary commodities which continues to fetch low prices.
Statistics show that trade gap between Malawi and both the European Union (EU) and the Common Market for Eastern and Southern Africa (Comesa) continued to widen in 2016 despite the nation’s continued export of raw commodities including tobacco.
Malawi’s exports to the United States (US) through the African Growth and Opportunity Act (Agoa) also recorded a downward spiral in the year.
Overall, the continued dwindling export base in the year under review led to a substantial drop in foreign exchange reserves.
Statistics from the Central Bank indicate that total foreign exchange reserves as at end December 2016 decreased to $943.54 million from $1,007 million on 31 December 2015.
Of the total reserves, $606.96 million was gross official reserves 2.90 months of import cover and $336.61 million was with the private sector reserves.