Malawi Exports to EU Record Growth – Imports from EU Decline

According to the Eurostat, the EU’s statistical office, Malawi’s exports to the bloc has increased by 7.4 percent in the first nine months of 2010. On the contrary, the EU’s earnings from trade with Malawi slumped by 7.8 percent, as compared to the same period from 2009.

The Malawi exports between January and September 2010 earned 187mn euros (K39bn), up from 174mn euros (K36.3bn), while the EU earned just 107mn euros (K22.3bn) down from 116mn euros (K24.2bn) of a year ago. Malawi has enjoyed steady growth in exports to the EU over the years due to the existing favourable trade agreements.

But with the upcoming Economic Partnership Agreements, which advocates trade reciprocity between the EU and the ACP countries, it is feared that the situation may get reversed. The EU is Malawi’s largest trading partner for exports, and the second largest for imports.

However, last November, the EU had adopted a new regulation revising rules of origin for products imported under the generalised system of preferences from least developed countries, which is expected to aid Malawi exports further. Malawi exports to the EU consists mainly tobacco (77 percent), sugar 14 percent and tea (5 percent); and Malawi’s EU imports are chemicals and machinery, 28 and 21 percent respectively.

A main portion of the Malawi exports was destined to Germany (36 percent), Netherlands (13.5 percent) and the UK (10.6 percent), during the first nine months of 2010. Whereas, the EU’s main exports to Malawi were from the UK (19.8 percent), Germany (18.9 percent) and France (12.2 percent), during the same period.

Nonetheless, in the last four year period (2005 – 2009), Malawi’s exports in the world trade has increased by 105 percent, while imports have risen by almost 40 percent, thus lowering country’s trade balance deficit 26.7 percent to 15.7 percent of GDP. Similarly, the EU trade with the African region, during the first nine months of 2010 also registered growth of about 9 percent, according to the Eurostat.

By Jose Roy