Malawi trade balance narrowed to a deficit of $528.6 million following a faster growth in seasonal exports, figures from the Reserve Bank of Malawi show.
In its latest financial and economic review published on Wednesday, the central bank reported that the deficit has narrowed from $555 million recorded in Q2.
Reads the report: “The narrower deficit was a result of a typical seasonal growth in exports which outweighed the growth in imports in the quarter. Specifically, exports and imports increased by $166.2 million and $139.9 million, respectively, in the review quarter.”
To put it into context, exports rose 95 percent from $174.1 million to $340.4 million while imports grew marginally slower from $747.4 million to $869 million, representing 19.1 percent.
Tobacco sales at the Auction Floors in this file photo
However, the trade balance has widened by 12.4 percent from $470 million recorded in the corresponding period last year.
Reacting to the developments, Mzuzu University agricultural economist Christopher Mbukwa said the trade deficit is expected because the country’s major commodities such as sugar, tobacco and tea have failed to boost the country’s export value in relation to the growth in imports.
In a WhatsApp response, he said: “Tobacco’s performance has not been robust recently as the share of the tobacco export price that is received by farmers has also been declining over time. We need to diversify to other key value chains such as pulses and oilseeds can also contribute to export values.”
Earlier on Wednesday, Mzimba North legislator Yeremiah Chihana of the Alliance for Democracy (Aford) accused the government of failing to address the problems that have created trade imbalances in the country.
He was reacting to the proposed Investment and Export promotion bill which Minister of Trade and Industry Sosten Gwengwe said would help mitigate the perennial trade deficits.
In his response to the bill, he said: “There are lessons which we should have learnt, because, for example, when we were trying to export maize to South Sudan what made us fail? Those components are very important and should have been factored into this bill.”
Earlier in August, the Parliamentary Committee on Trade and Industry reported that Malawi had made only $1.4 million out of a possible $900 million from a trade deal to supply maize signed with South Sudan in 2021.