SADC Markets for Malawi

Direction of Malawi’s Exports in the Region

Key trade partners in the region, in order of scale based on total exports value percentages since 1994, are South Africa, Zimbabwe, Mozambique, Zambia, Tanzania and Botswana. The rest of the SADC countries import very little from Malawi, that is below 1%. Exports to South Africa started declining in 2007 and reached bottom levels in 2010 at 29.9%. Nonetheless over 50% of total Malawi intra-SADC exports were destined for South Africa over the period.
Of the three Malawi bordering neighbours Mozambique, Zambia and Tanzania, it is Mozambique which imported more from Malawi at 13.5% of Malawi’s total exports over the period than Zambia at 8.2%, and Tanzania at 4.9% despite this country having access to the sea like Mozambique and South Africa. Since 2008, Malawi exports to Mozambique and Zambia have been increasing whilst with Tanzania the trend shows that exports are declining.
The trend for Malawi exports to Zimbabwe is that between 2001 and 2005 exports declined because of Zimbabwe’s economic crisis which had followed their political crisis, but since 2006 exports started increasing and have been substantial since then. In 2006 and 2007 Malawi’s main export to Zimbabwe was maize because Zimbabwe had poor grain harvests then while Malawi had excess maize harvests. In 2006 Malawi had signed a bilateral relationship with Zimbabwe that had cleared Malawi exporters’ hurdles to that market. The bilateral agreement which later coupled with the Zimbabwe economy’s slow but steady recovery from the economic crisis propelled increase in Malawi exports to Zimbabwe. Nonetheless, despite Zimbabwe’s economic problems it has maintained the second position as Malawi’s main trading partner in the SADC region.
With the rest of SADC countries it appears that despite most Malawi exports having a revealed comparative advantage, such products do not substantially access markets of these SADC member countries. The major reasons include either small size of their economy or distance which makes land transport costs unbearable. This gives chance for importers in those countries to import from their immediate neighbours who, after all, produce similar exports to Malawi. For Malawi, the SADC Free Trade Area (FTA) has not done much to reduce transport costs in the region.