Malawi export earnings drop

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Malawi exports dropped to K47.3 billion during the first quarter of 2012, down from the estimated K75.9 billion recorded during the fourth quarter of 2011, representing 60.7% drop.

In its Finance and Economic review report, Reserve Bank of Malawi-RBM-attributed the decline to the agriculture exports drop

On the other hand, overall Balance of Payments-BoP-position, as measured by the change in net international reserves – recorded a deficit of K8.9 billion during the first quarter of 2012, an improvement from a deficit of K11.2 billion recorded in the preceding quarter.

“Projections for the merchandise trade indicated a trade deficit of K25.5 billion in the first quarter of 2012 from a deficit of K25.9 billion during the fourth quarter of 2011,” indicates RBM in the report.

According to the central bank’s statement, imports are on the other side projected to amount to K72 billion in the first quarter of 2012.

This is down from 101 billion kwacha registered in the preceding quarter.

The reserve Bank says imports declined in the first quarter of the year because of the decline in importation of agricultural inputs as well as foreign exchange shortages.

“Projection for the merchandise trade indicated deficit of K25.5 billion in the first quarter of 2012 from about K25.9 billion during the fourth quarter of 2011,” says RMB.

Malawi has in the recent past faced acute shortage of foreign exchange greatly affecting the importation of goods into the country.

The low forex availability has among other things been attributed to drop in donor funds as most donors cut their aid taps citing governance and rule of law concerns.

However, grants from donors towards improving the BoP are reported to have gone up in the first quarter of the year and stands at K10.8 billion in the quarter from K8.3 billion in the preceding quarter.

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