Long, winding road to export-led growth

Africa-Press – Zambia. Malawi, a land-linked coun­try in the south­ern African region, grapples with glar­ingly high trade defi­cits each year. The coun­try has an annual trade gap of $2 bil­lion, with imports seen at $3 bil­lion and exports at a mea­ger $1 bil­lion.

The South­ern African Devel­op­ment Com­munity mem­ber state does not pro­duce enough for export to off­set the cost of import­ing com­mod­it­ies such as fuel, fer­til­iser and med­ical drugs, which top the list of the imports bill. Other com­mod­it­ies include kaunjika (second­hand clothes), foot ware, cement, iron sheets, fur­niture, elec­tronic gad­gets and even tooth­picks. Simply put, in Malawi, almost everything is impor­ted.

On the other side, the coun­try’s exports bas­ket com­prises low value and unpro­cessed agri­cul­tural com­mod­it­ies, with tobacco— which is also los­ing its charm by the day—being a top export crop, fol­lowed by sugar, tea and cof­fee. The coun­try is imple­ment­ing policies, includ­ing the National Export Strategy (NES II), in its des­per­ate attempt to nar­row the ever-yawn­ing trade gap and ensure an export-led eco­nomic growth.

Launched in Decem­ber 2021 with a five-year imple­ment­a­tion life-span, the second NES is craf­ted to facil­it­ate an increase of exports as a per­cent­age of gross domestic product from 14.6 per­cent to at least 20 per­cent.

The strategy’s main object­ives include increas­ing the con­tri­bu­tion of exports to eco­nomic and social trans­form­a­tion, pro­mot­ing diver­si­fic­a­tion of products and mar­kets, and enhan­cing inter­na­tional com­pet­it­ive­ness of Malawi’s indus­tries, enter­prises and products. The strategy also aims to unlock Malawi’s full export poten­tial and to con­trib­ute towards achiev­ing aspir­a­tions in laid out in the Malawi 2063 vis­ion. However, just like its pre­de­cessor doc­u­ment, the NES II’s aspir­a­tion to shift towards export-ori­ented indus­tri­al­isa­tion seems to be yield­ing less than anti­cip­ated res­ults. And the diversity concept remains an idea.

Fluc­tu­ations in trade num­bers dur­ing NES II’s imple­ment­a­tion period has made com­ment­at­ors doubt the pos­sib­il­ity of Malawi attain­ing growth aspir­a­tions within the pro­jec­ted five-year time­frame. They say diversity demands aggress­ive­ness and not merely shift­ing to the other deemed high poten­tial sec­tors. Min­ing and the other sec­tors should, there­fore, play com­ple­ment­ary role, and not be per­ceived as altern­at­ives or a replace­ment to agri­cul­ture.

Malawi needs to first awaken the sleep­ing giant in the agri­cul­ture sec­tor. Malawi—a net-importer—is partly bank­ing on the African Con­tin­ental Free Trade Area, among oth­ers, for a mar­ket oppor­tun­ity for its export products. To sur­vive in such a space, it takes build­ing a com­pet­it­ive edge and a com­pet­it­ive advant­age.

For More News And Analysis About Zambia Follow Africa-Press