POTENTIAL FOR EXPORTING INTO SADC AND COMESA COUNTRIES FROM MALAWI

Abstract

The economy of Malawi is feeling the effects of persistent trade deficits. This has resulted in recurrent shortage of foreign currency on the formal market. This study puts up a case for increasing exports into the Southern Africa Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA) regions. A view peddled by the National Export Strategy (NES). The study empirically investigates the determinants of Malawi’s exports into COMESA and SADC. Furthermore, it examines the potential that the country has to export to member states of the aforementioned regions. A gravity model for exports is estimated to determine factors that influence Malawi’s exports into the region and subsequently export potential into each member state is evaluated. The study observes that Malawi has exhausted its potential to export to the bigger economies (Egypt and South Africa) in the regions. But it has potential to increase its exports into two of the three countries it shares border with. A negative relationship was observed on distance between Malawi and the member states of the regions. The study recommends that when exporting, Malawi should pay more attention to markets closer to its boundaries than those afar.