By Kingsley Jassi:
Malawi’s trade performance is expected to suffer an increased deficit this year, driven by rapidly growing imports of fuel and fertiliser, as vehicle import costs also rise.
This is according to the World Bank. In its latest Malawi Economic Monitor (MEM), the bank sees fuel alone accounting for approximately 20 percent of monthly imports over the past two years.
The bank also sees fuel continuing to drive the imports bill.
The World Bank’s projection points to a further deterioration of the trade deficit in 2026, with the imbalance stemming from deeply rooted structural challenges.
“On the export side, the revenue base remains narrow, and highly volatile—with tobacco contributing about 40 percent of export revenues—leaving Malawi exposed to fluctuations in global commodity prices and shifting demand,” the report reads.
In a Facebook post on Tuesday, Reserve Bank of Malawi Deputy Governor Kisu Simwaka said this year’s declining tobacco exports—recorded at $287 million by October from $526.2 million—could further affect the trade gap.
National Statistical Office (NSO) figures point to increased exports, of about $700 million, against $2.7 billion imports, indicating a lag in growth of exports compared to imports.
Malawi, according to the World Bank, has significant outstanding import bills on account of fuel and fertiliser imports—while the bill for vehicle imports has recorded a notable increase.
Meanwhile, the Bretton Woods institution has said the parallel market premium over the official rate has narrowed from a pea
of 150 percent in early 2025 to approximately 130 percent as of June 2026.
It says this persistent gap reflects a confluence of structural vulnerabilities, including deficit driven money creation,
elevated broad money supply growth and chronic trade deficits.
“These dynamics, compounded by a narrow and declining export base and the deterrent effect of trade barriers on exports, weigh heavily on Malawi’s capacity to generate and retain foreign exchange,” the World Bank says.
Economist Velli Nyirongo has since urged the authorities to reduce uncertainty on access to foreign currency for legitimate imports and investment while strengthening the central bank’s reserves and market operations.