By Daniel Zimba:
The government’s promise to provide foreign exchange (forex) to second-hand clothes wholesalers, as a means of controlling the price of the product in the country, has sparked mixed reactions from various stakeholders who are seeking clarification on the move.
Addressing vendors who protested the increase in second-hand clothes prices in Lilongwe on Tuesday, Cabinet ministers said the government always reserves foreign currency, which, on this occasion, would be released to help control prices.
However, in response to these remarks, a group of people under the banner ‘Concerned Citizens of Malawi’ challenged the ministers to provide clarification on the country’s foreign currency availability.
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In a statement issued Wednesday, leader of the group, Edwards Kambanje, said the comments implied that the government is withholding forex while the people of Malawi are suffering due to the ongoing forex scarcity.
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“Malawi is facing severe forex shortages that have affected various sectors, including healthcare, fuel availability and the importation of essential goods such as second-hand clothes.
“If the government truly has enough forex, why are vendors struggling? Why are commodity prices still rising, pushing many Malawians deeper into poverty?” the statement reads.
It also supports earlier claims by human rights activist Silvester Namiwa that some Malawi Congress Party and government officials are benefiting from the country’s forex scarcity problem, which is contributing to its persistence.
Kambanje has called on the government to engage the public and provide clarification on their long-term solutions to the forex problem and the rising prices of essential commodities in the country.
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Business and economic analyst Mavin Banda supported the concerns raised by the group.
Banda, however, questioned whether the government’s decision to release forex in order to control second-hand clothes prices would have a lasting impact, considering the fact that these products are not produced domestically.
“Given the current state of our economy and the role of second-hand clothes, if forex is released, the products won’t be sold abroad, which means the only currency generated will be in Malawi Kwacha.
“So, where is the productivity in forex in that case? Where is the multiplier effect? This decision seems unwise,” Banda said.
Another governance and social analyst, Victor Chipofya, echoed Banda’s concerns.
Chipofya said that the ministers’ remarks on forex suggest that either they were unsure of what they were saying or they simply aimed to ease tensions.
“If we indeed have forex reserves, you cannot decide to withhold forex. Either the person speaking was not clear on what they said, or they were just trying to calm things down,” Chipofya said.
