One of the country’s investment management and advisory firms, Nico Asset Managers, says it expects Malawi’s exports to grow modestly in 2016 after the low returns experienced in 2014 and 2015 that resulted from the shutdown of Kayelekera uranium mine.
In its January 2016 Economic Report, Nico Asset Managers says it expects export growth to be robust between 2016 and 2019, underpinned by government’s efforts to promote production of cotton and other agricultural commodities.
“Tobacco will remain the main export, although its growth potential is limited amid weak global prices, rising deforestation and weather related unpredictability,” reads the report in part.
The firm further says it expects imports to moderate in 2016, despite investment growth picking up slightly, as global commodity prices fall, including oil, and currency depreciation dampens domestic demand.
“The review of the mining regulations may affect the level of investment in the country, including the compendium projects and the exploration of mining that may take place.”
“This may also affect the level of exports from the country. However, we expect that these will only impact export growth in the long term as such projects take time to bear fruit,” reads the report.
Nico says it is critical for the country to diversify its export base in order to be competitive and reduce risk.
It says the current account deficit is expected to narrow in the long term as exports pick up, reaching 20.1 percent of GDP in 2019.
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