Trade deficit—the difference between imports and exports—narrowed in April at the back of improved exports, figures contained in the Reserve Bank of Malawi (RBM) Monthly Economic Review show.
According to the review, the balance narrowed to minus $178.1 million in the month under review from minus $204.6 million in March 2022 and minus $346.9 million K276 recorded in a corresponding month in 2021.
The report attributes the development to a 14.1 percent ($5.6 million) increase in exports to $45.6 million (K37.5 billion), and a decrease of 8.5 percent (K20.9 million) in imports to $223.7 million (K184.5 billion).
It adds that the development in export performance was mainly attributed to 8.8 percent, and 7.1 percent increases in exports of cereals and sugar, to $6.9 million, and $2.3 million, respectively.
“The decrease in imports was recorded in fertiliser, fuels, vehicles and pharmaceuticals which declined by 73.6 percent ($3.5 million), 41.3 percent ($18.3 million), 23.3 percent ($4.9 million) and 19.2 percent ($3.2 million) to $1.3 million (K1.0 billion), $26.1 million (K21.5 billion), $16.0 million (K13.2 billion), and $13.5 million (K11.1 billion), respectively,” the report reads.
Commenting on the figures, an economics professor from the University of Malawi Ben Kalua said it is not surprising because April is not a farming season, therefore it was expected to see a significant drop in fertiliser imports.
He added that the country may face a huge trade deficit for the remainder of the year as its export base remains the same but prices of goods have risen on the international market.
“We should have been having plans for winter cropping now whether reactionary because of what is happening globally or strategically to improve agricultural exports but do we have the strategy for winter cropping now?,” Kalua wondered.
Malawi is a predominantly importing and consuming nation highly dependent on exporting raw agricultural products with unprocessed tobacco as the main export and foreign exchange earner.
Figures presented on Tuesday by the Economics Association of Malawi (Ecama) show that Malawi has been facing a negative trade balance of $2 billion per annum since 2019.
An analysis of trade figures between 2019 and 2021, according to the economic think-tank, revealed that the country has been importing goods worth $3 billion while exporting goods worth just around $1 billion.
Director of Economic Policy and Research at the Reserve Bank of Malawi, Kisu Simwaka, admitted that Malawi has not done a good job in terms of generating foreign exchange in the country.
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