Trade deficit widens further
Trade deficit— the difference between imports and exports— worsened in 2021, seen at minus $610.3 million in the last quarter of the year under review.
According to figures from the Reserve Bank of Malawi (RBM), this was wider than the third quarter, seen at minus $484 million.
The figures further indicate that the deficit has never dropped as it started narrower in the first quarter at $413.7 million but increased to $490.7 million in the second quarter.
RBM has attributed the ever rising deficit to dwindling exports and highly increasing imports.
During the fourth quarter, for example, exports declined to $260.3 million from $338.4 million in the preceding quarter while imports increased to $870.6 million from the preceding quarter’s position of $822.4 million.
“This development is seasonally expected, as quantity of traditional exports (tobacco, sugar and tea) decline during the fourth quarter of the year while imports increase during the same period due to importation of farm inputs for the next crop year,” reads RBM’s first Monitory Policy report for 2022.
Malawi remains an agrarian economy, highly dependent on exporting raw agricultural materials.
Experts have been advocating value addition and industrialisation as a path towards narrowing the trade deficit.
Minister of Trade and Industry Mark Katsonga Phiri said he has noticed disjointed operations in achieving trade in the country, which he is aiming at ironing out.
He added that he would further push bigger industry players to support SMEs’ growth and work together towards achieving increased exports for the country.
“In the past, shops were full of locally produced goods because the industry was vibrant but now things are upside down and that kills our industry and those are the things I will work on regularising,” he said.
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.
