Trade between Malawi and the United Kingdom (UK) has declined over a three-year period as data shows  that exports from UK to Malawi have dropped by 32 percent.

The UK’s Department for International Trade data indicates that in 2019, the total value of UK exports to  Malawi stood at  £53 million (about K65.5 billion) before declining further to £40 million (about K49.4 billion) in 2020 and £36 (about K44.5 billion) million in 2021.

The figures show that over the years, trade between Malawi and UK has tilted in favour of the latter.

On the other hand,  the figures indicate that the total value of UK imports to Malawi stood at £36 million (about K44.5 billion) in 2019  before declining further to £34 million  (about K42  billion) in 2020 and £15 million (about K18.5 billion) in 2021.

The figures further show that total trade in goods and services between the UK and Malawi was worth £59 million (about K71 billion) in the four quarters to the end of 2022, a decrease of 25.3 percent from the four quarters to the end of first quarter (Q1) of 2021.

Reads the Malawi trade and investment factsheet in part: “Total UK exports to Malawi amounted to £39 million  [about K47 billion] in the four quarters to the end of Q1 2022, a decrease of 18.8 percent compared to the four quarters to the end of Q1 202.

“Similarly, total UK imports from Malawi amounted to £20 million [about K24 billion] in the four quarters of 2021 to the end of Q1 of  2022, a decrease of 35.5 percent compared to the four quarters to the end of Q1 2021.”

Speaking in an interview on Tuesday on the trade performance, Catholic University of Malawi economics lecturer Hopkins Kawaye said the trend, which could be on account of several factors, including the Covid-19 pandemic, means low revenues for the country, a situation which could put continued pressure on Malawi’s local currency as a decline in foreign currency affects the kwacha. 

He said: “Such a development could put pressure on the local unit, which is currently weakening on foreign exchange supply shortages.

“As the kwacha gets weaker, Malawi as a net importer will be buying commodities at higher price, thereby pushing up inflation, which is a usual phenomenon in  the country.”

National Working Group on Trade and Policy chairperson Frederick Changaya said in an interview that Malawi needs to replace traditional exportwith high value-added products if it is to make the most of the UK market.

He said: “Malawi needs to help factories to grow to a level where we can substitute imports. Further Malawi needs black participation in that industrialisation drive.

“No country develops when its people are excluded from value-added goods production. So, you will see that though it appears far away, development and deficit reduction would take a few policy instruments and a few support actions.”

According to the UK data, road vehicles other than cars, office machinery, scientific instruments, cars and other manufactures topped the list of Malawi’s imports from the UK.

On the other hand, coffee, tea and cocoa, vegetables and fruit, sugar, furniture and cereals topped the list of Malawi’s exports to the UK.

Ministry of Trade and Industry spokesperson Mayeso Msokera was yet to respond our questionnaire, but he is on record as having said that government continues to implement policies and strategies to boost trade.

He said the main focus is to build the export readiness of Malawian exporters and develop regional and global value chains, promoting entrepreneurship with emphasis on micro, small and medium enterprises and addressing critical enablers related to exports such as energy, transport, market intelligence and trade facilitation.

Treasury figures show that although Malawi’s merchandise trade balance improved in 2021 to $982 million (about K1 trillion) from $1.94 billion (about K2 trillion) in 2020, traditional exports contributed to the 50 percent rise in export earnings.

Data contained in the 2022 Malawi Government Annual Economic Report shows that exports rose to $1.56 billion (about K1.61 trillion) from $773 million (about K797 billion) recorded in 2020 with exports from tobacco, tea and sugar growing  by 20 percent, 27 percent and 37.8 percent, respectively.

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