The country’s appetite for foreign goods and services continues to grow despite its failure to sell significant volumes of locally produced products and services to the rest of the world, witnessed by a -$629.6 million (about K478 billion) record high trade balance recorded at the end of the last quarter of 2020.
According to a financial and economic review, published by the Reserve Bank of Malawi (RBM) recently, between the months of October and December 2020, the country imported goods and services worth $833.6 million while exporting goods and services worth $204 million.
The trade balance represents a 41 percent increase when compared to the -$446.5 recorded in the last quarter of 2019.
The trend has been consistent in previous years, characterised by the country’s failure to maximize earnings from the export market.
Chancellor College Economics Professor Ben Kalua said Malawi’s export basket remains narrow to register meaningful exports.
He said the problem had been compounded by the country’s failure to diversify the agriculture sector let alone the entire economy.
“We have been slow in damping tobacco and embracing opportunities such as cannabis. We need to embrace such because UK is currently the biggest exporter of cannabis but it does it in greenhouses while here it grows freely and it is a multi-trillion dollar produce,” Kalua said.
In a separate interview, Minister of Trade Sosten Gwengwe said the figures may not represent the situation on the ground as exports data are rarely captured in the country while imports data are heavily reported.
“What we record as exports is not a true reflection of what we send out of the country but, still, we have the National Export Strategy 2 which will keep on encouraging exporters to do more,” Gwengwe said.
The Malawi economy hugely relies on the agriculture sector despite the industry being underdeveloped.