Trade gap widens 15% to K4.6tn—NSO

Malawi’s trade deficit widened by 15 percent in 2025 to $2.67 billion (about K4.6 trillion) from $2.2 billion (about K3.8 trillion) the previous year driven by a surge in imports and a decline in exports, National Statistical Office (NSO) data show. But economists say the worsening trade deficit reflects the country’s over-reliance on few export commodities, persistent underproduction and weak participation in international markets. The NSO international merchandise trade statistics for December 2025 show that total imports were recorded at $3.6 billion (about K6.3 trillion) in 2025 from $3.2 billion (about K5.6 trillion) in 2024 while exports slightly dropped to $936.3 million (about K1.63 trillion) in 2025 from $947.2 million (about K1.65 trillion) the previous year.

In December 2025 alone, the trade gap widened by 12 percent to $271.2 million (about K474.8 billion) from $238.9 million (about K418 billion) in November 2025, indicating that imports that comprise fuel, fertiliser and pharmaceuticals continued to dwarf exports that include tobacco, tea and pulses. Total exports for December 2025 were recorded at $60.9 million (about K107 billion), showing a 5.7 percent decrease from $64.6 million (about K113 billion) in December 2024. Reads the report in part: “Total imports increased from $327.1 million [about K572 billion] in December 2024 to $332.1 million [about K581 billion] in December 2025.

This reflected a 1.5 percent increase. The trade deficit increased to $271.2 million [about K475 billion] in December 2025.” In December, top 10 export commodities accounted for 84.4 percent of total exports led by tobacco at 72.1 percent, tea at 4.2 percent and sugar at 3.3 percent while top 10 imports accounted for 66.1 percent of total imports led by fuel at 23.8 percent and fertiliser at 13.3 percent. University of Malawi economics lecturer Edward Leman, in an interview on Wednesday, said for decades, Malawi has relied heavily on tobacco as its main source of export revenue, with limited and inconsistent efforts towards diversification.

[paywall]

He said: “Value addition has remained largely rhetorical, repeated year after year with little tangible progress. “As a result, national competitiveness remains fragile and the country is steadily losing comparative advantage in traditional exports such as tea. Compounding this challenge is the fact that domestic production increasingly fails to meet local demand, forcing higher levels of importation.” Mzuzu University economics lecturer Christopher Mbukwa said the widening trade deficit is a sign of both structural and transactional weaknesses in the economy.

“The reason for the increased trade deficit is the drop in sales of tobacco, groundnuts and tea. The rise in this deficit can be attributed to transactions that were done in kwacha this year as opposed to the traditional dollar transactions over the years,” he said. Export Development Fund managing director Frederick Chanza said yesterday the core weakness is not merely weak export receipts, but the country’s chronic failure to produce at a scale demanded by the global market. He said the economy will remain trapped “if we keep on exporting raw commodities and importing expensive finished products”.

[/paywall]