Intra-SADC Trade Performance Review 2006: Chapter 2: Malawi

Year of publication: 
2006
Author(s): 
Lawrence Mapemba, independent consultant
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Malawi’s trade balance has been worsening in recent years. Even though the value of its exports has increased over time, Malawi’s imports have been increasing in value much more sizeably than have its the exports. The Malawian economy has not been innovative enough to move away from a specialisation in the production and exportation of primary agricultural products. Since the colonial era, and more than thirty years after independence, Malawi has relied on agriculture and the exportation of primary agricultural products, like tobacco and tea, for the bulk of its export revenue earnings.
 
 Like any other country, the Malawian economy’s demand for processed products, machinery, vehicles and other manufactured products has resulted in the country’s imports surpassing the value of its exports. Even as a primarily agricultural economy, Malawi has regularly failed to produce enough food for its own population and has been forced to import food. As a land-locked country, coupled with its low levels of education and a lack of endowments of large quantities of valuable natural resources, Malawi may look at the agricultural sector as a source of economic growth in the medium term. In the long term, Malawi needs to diversify in order to survive in the global economy.
 
The current government should move quickly to develop the Shire-Zambezi waterway, as this may reduce transportation costs and ease its access to seaports through which its imports and exports travel. Promoting the development of high-quality export products and diversifying its exports will allow Malawi to take full advantage of the waterway project.