A report by Agra formerly Alliance for a Green Revolution in Africa has observed Malawi’s limited forex will bring problems in stabilizing maize prices due to high importation cost of the commodity.
As of September the Reserve Bank of Malawi (RBM) reported that the total foreign exchange reserves position was estimated at $560.3 million (2.2 months of imports) from US$544.8 million in August 2024. This is lower than S$641.1 million (2.6 months of imports) recorded in September 2023.
The report—Food Security Monitor—puts on spotlight 17 countries in Africa and discusses variables affecting food security.
According to the report, owing to Malawi’s food insecurity amplified by El Nino induced drought and floods, there has been a surge in maize imports leading to high cost of maize.
“This increase can be attributed to high transportation costs associated with sourcing maize from neighbouring countries like Tanzania. The current water and power crisis in Zambia is hindering irrigation cropping, while Malawi’s limited forex availability presents difficulties in stabilizing future prices,” reads the report in part.
An August report by Famine Early Warning Systems network indicates that Malawi is facing a negative balance in maize supplies, with overall production at 28 percent lower than a five-year average and informal imports insufficient to offset the deficit.
The imbalance comes in despite the informal maize imports having increased, with around 99,043 metric tonnes (MT) brought in from April to August 2024 as compared to 13,560 mt imported during the same period last year, representing a 630 percent increase.
According to the Agra report, the current prices of maize in local currencies in Zambia, Malawi and Zimbabwe are moderately low to slightly high ranging from 5.55 percent to 23.40 percent respectively compared to the past 1-6 months.
Development policy analyst Ken Sakala said the country should be looking at revamping irrigation and extension services and an overhaul of the Affordable Inputs Programme.
