By Kingsley Jassi:
Malawi’s trade performance slumped in September, registering a higher trade deficit of $193 million at the end of the third quarter from close to $130 million in August.
This is contained in the September 2023 Monthly Economic Review of the Reserve Bank of Malawi, which shows exports declined by 32.9 percent to $123.3 million during the month against a 0.8 percent increase in imports to $316.4 million.
This leaves the country’s cumulative trade deficit at about $1.95 billion as of the third quarter of this year, making it on set to push this year’s annual trade deficit and surpass last year’s at $2.18 billion.
Despite the slump in exports in the month under review, the central bank recorded an increase in forex receipts, which improved the foreign reserves position in September to $560.3 million as compared to $544.8 million, according to the report.
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As of the third quarter, total imports, as compiled from the monthly economic reports, were $2.3 billion against total goods exports worth $647 million.
According to the central bank, the drop in exports in September was largely driven by decreases in sales of tobacco, which were reported at $93.9 million from $126.5 million in August, while pulses exports also dropped to $13.7 million
“The goods trade balance deteriorated to a deficit of $193 million from a trade gap of minus $129.9 million in August 2024 and compared to minus $179.8 million in the corresponding month of 2023,” says the report.
The total exports in September declined to $123.4 million from $184 million in the preceding month while imports of commodities rose to $316.4 million in the review month from $313.9 million in August.
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“The uptick was mainly due to increased purchases of fuel, fertiliser, printed books and machinery to $47.2 million, $32.7 million, $14.2 million and $28 million, respectively, from $42.8 million, $27.5 million, $5.5 million and $23.8 million in the preceding month.
The figures also show reduced imports of pharmaceuticals, vehicles and cereals as these are among the top forex drainers.
Minister of Industry and Trade Sosten Gwengwe recently expressed worry over the continued appetite to import even on things that are locally produced while admitting the need to boost production.
He, however, said with the weak Kwacha against importation of high value imports, there has to be an increased trade deficit, especially when production for exports is being affected by a host of challenges.
“Fertiliser imports are high at the moment and these are high value imported products. But it’s also about production. We need to create a good environment for producers and there are efforts already under way,” Gwengwe said.
