Malawi - International trade



Malawi's balance of trade has always been precarious. With 90 percent of its receipts coming from agricultural commodities, export accounts are highly sensitive to fluctuations in production levels and shifts in world market prices. Malawi is also vulnerable on its import side. The expense of freighting all of its imports overland is a continual drain (adding as much as 30

Trade (expressed in billions of US$): Malawi
Exports Imports
1975 .140 .253
1980 .295 .439
1985 .249 .285
1990 .417 .581
1995 .405 .475
1998 N/A N/A
SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.

percent to the import bill), while droughts, which periodically force the government to mass-import basic foods, are a regular source of balance-of-trade shortfalls. Additional problems stem from Malawi's complete dependence on imported oil, which has caused particular difficulty as oil prices have risen. The net effect, despite government prioritization of a balanced budget, is a pattern of significant trade deficits. In 1999, however, the shortfall was only $2 million on exports of $510 million and imports of $512 million.

Of Malawi's exports in 1999, 15 percent went to South Africa, 9 percent each to the United States and Germany, and 7 percent to the Netherlands. Of Malawi's imports, 38 percent came from South Africa, 18 percent from Zimbabwe, 8 percent from Zambia, and 4 percent from Japan.

In 2000, Malawi joined 8 other African nations in the free-trade area of the Common Market for Eastern and Southern Africa (COMESA). Having removed its 30 percent import duty on goods from those 8 countries, it plans to remove all trade barriers by 2004. Free movement of labor and residency is scheduled for 2014, with full monetary union and a common central bank by 2025.

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