Trade pick-up amid economic volatility
Private sector players are upbeat that business activity would pick up in the remaining part of the year, owing to growing confidence among players and the public as Covid cases reduce.
However, key macroeconomic fundamentals remained volatile for a greater part of the year.
For instance, the country saw the Kwacha losing grip on other foreign exchange currencies, depleted foreign exchange reserves and fluctuating headline inflation.
According to the monthly economic review for July published by the Reserve Bank of Malawi (RBM), the Kwacha depreciated by 0.7 percent against the US dollar and traded at K817.43 per dollar as at end July 2021.
Recent exchange rates show that the Kwacha is now trading at K823 to a dollar.
The review further indicates that gross official reserves declined to $395.4 million (1.6 months of imports) as at end July 2021 from $417.9 million (1.7 month of imports) recorded in the preceding month.
Recent figures from the National Statistical Office show that inflation stood at 8.3 percent in August, 1.3 percentage points higher than 7 percent recorded during the same time last year.
But, in an interview, Malawi Confederation of Chambers of Commerce and Industry President James Chimwaza said there has been increased velocity in trading activity in recent months.
“It is too early to give actual results but there is more business activity than before. There is a lot of confidence; there is more movement of people; as such things are getting better each day.
“We are confident that this will continue to the extent that we will have the agriculture fair next month and a business retreat in November in Mangochi where the private sector will brainstorm on how to deal with challenges we have faced during the pandemic,” Chimwaza said.
In a separate interview, Cross-border Traders Association of Malawi Chairperson Esther Tchukambiri said cross-border trade remains subdued due to boarder closures in some countries that trade with Malawi significantly.
“There are a few people that are able to export and import from Tanzania, Zambia and South Africa but the figures remain small. We pray for most of these countries to fully open up for us to resume our businesses at maximum capacity,” Tchukambiri said.
Ministry of Trade spokesperson Mayeso Msokera said the government expects continued pick-up in business activities going forward. “Most businesses that were heavily affected by Covid like in the hospitality industry, food, transportation, wholesaling and retailing and manufacturing sectors are going to rebound and register notable recoveries,” Msokera said.
