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Forex woes affect Castel operations

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Shortage of foreign exchange in the county has forced local alcoholic beverages manufacturer, Castel Malawi, to temporarily suspend production of spirits Malawi Gin, Malawi Vodka and Premier Brandy.

The company said this in a statement issued on Friday.

The alcoholic beverages manufacturer has said that the option will lead to scarcity of the products on the market.

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“The company will advise its customers when more favourable conditions will be in place to restart the production of these iconic and exportable products,” the statement reads.

Since last month, foreign exchange shortage has been affecting most sectors of the economy, leading to scarcity of essential products such as fuel.

Despite being a predominantly importing and consuming nation with an annual import bill of $3 billion per annum, Malawi’s export base stands at a meagre $1 billion per year.

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The Reserve Bank of Malawi (RBM), however, insists that the country has foreign exchange that can cover for a month-and-a-half but it is being rationed according to the essence of sectors of the economy.

RBM Governor Wilson Banda recently said, in the short-term, the government is getting credit from banks locally and internationally and other partners, a development which is expected to ease the situation.

“Our import bill is around $3 billion but our exports amount to $1 billion which creates pressure on the currency but we are borrowing to fill the trade deficit and that is what is helping keep the Kwacha afloat but we need to improve on our exports in the long run,” he said.

Castel Malawi is the biggest manufacturer of alcoholic beverages, manufacturing spirits, beers and ciders.

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