Chairperson of the Parliamentary Committee on Business and Finance, Gladys Ganda, says doubling Malawi’s annual export growth will be key in the attainment of the citizens’ social and economic development aspirations espoused and spelt out in the Malawi 2063 (MW2063).
Ganda made the remarks in the National Assembly on Monday in her response to the proposed 2022-2023 National Budget, which the Minister of Finance and Economic Affairs, Sosten Alfred Gwengwe, presented in the National Assembly on February 18, 2022.
The Nsanje Lalanje Democratic Progressive Party (DPP) lawmaker said her Committee observed that Malawi continues to register a negative trade balance, citing the fourth quarter of 2021 when the trade balance closed at a negative USD610.3 million compared to a negative USD548.8 million in the fourth quarter of 2020.
Ganda added that in 2021, Malawi’s export basket continued to be highly dominated by tobacco, which claims US$332 million (40 percent), and sugar and coffee, which claim the second and third slots with 10 percent each.
“The three products have claimed 60 percent of total exports. The Committee only hopes that the implementation of the second National Export Strategy will turn around this dominance and consequently improve the trade balance. The Committee is alive to the fact that in order for the MW2063 to be realized, exports need to be increased from the current 14.6 percent of GDP to 20 percent of GDP, which entails doubling the current annual export growth to 5.6 percent,” she said.
Turning to the proposed 2022-2023 National Budget, Ganda said her Committee is aware of the uncertainties in the global economy that will potentially pose risks to growth.
She cited the emergence of new Covid-19 variants as some of the factors that could prolong the pandemic and induce renewed economic disruptions.
Others are supply chain disruptions, energy price volatility, and localized wage pressures, which spell uncertainty around inflation and policy paths.
In the 2022/23 budget, growth in Malawi has been projected to continue to recover in 2022 at 4.1 percent from a previous projection of 3.9 percent in 2022.
But Ganda stated that her Committee took note of the pressures on inflation in the 2021 financial year, which resulted in an end-year double-digit inflation rate of 11.5 percent and an annual inflation rate of 9.3 percent.
Quoting the RBM Monetary Report, the celebrated Business and Finance Chairperson said her Committee had noted some of the factors that drove inflation up were the adjustment in domestic fuel pump prices; sustained fiscal deficits; seasonal increase in prices of domestically-produced agricultural food items; imported inflation; and pass-through of kwacha depreciation.
“In 2022/23 the annual average inflation has been projected at 10 percent. The Minister projects some sense of optimism to reduce the inflation from 11.5 percent to 10 percent despite the above economic developments. The Committee has therefore no choice but to question the inflation projections given by the Minister. The Committee in consideration of the high levels of inflation, therefore, recommends that deliberate measures be put in place to protect the poor,” emphasized Ganda.
At a recent one-day training for exporters in Lilongwe, the Malawi Investment and Trade Centre (MITC) Chief Executive Officer, Paul Kwengwere, lamented Malawi’s appetite for imports, which has been growing more than the country’s ability to export over the years.
Kwengwere disclosed that trade imbalance increased from about USD -1.3 billion in 2010 to an estimated USD-2.2 billion in 2020, representing a worsening increase of about 72 percent.Follow and Subscribe Nyasa TV :