By Kingsley Jassi:
Low exports continue to drive down foreign reserves amid persistent supply side pressures and this has prompted monetary authority—the Reserve Bank of Malawi (RBM)—to seek and drag potential and existing exporters to the markets.
The central bank eyes an $80 million in proceeds from export by at least 100 firms that will be supported under the Malawi-Transforming High Potential Resilient Value Chains (M-Thrive).
Under the initiative, the central bank would be working with the Ministry of Finance and the Ministry of Industrialisation as grants amounting to $39 million will support the 100 firms, according to the project document.
“The project will provide a combination of local and foreign currency financing for direct and indirect exporters, including SMEs,” the project document reads.
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However, David Nkhwazi, Managing Director of Stuart M. Grant Limited cites a host of challenges for exporters, requiring multifaceted support.
His company exports ornamental fish and recently invested in fish cages in Lake Malawi for production of chambo.
The company has seen a 50 percent drop in ornamental fish exports due to competition as they suffer high costs of shipment.
Nkhwazi also cites exchange rate rules that punish exporters, coupled with the cost of operation, making goods from Malawi more expensive on the export market.
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The 25 percent forex surrender and the use of official exchange rate means exporters incur losses as their cost of operations is driven by black market rates, according to Nkhwazi.
“That is a huge disparity that needs to be resolved, otherwise a lot of exporters are affected and it is discouraging to do export,” he said.
In a recent interview, RBM Deputy Governor Kisu Simwaka, admitted there is a downside to the forex regulations but was quick to say they were temporary to contain the immediate situation and would be reviewed as the situation improves.
Malawi’s balance of payment woes deteriorated in 2025 as imports were 2.5 times more than exports, worsening the current account position that was close to 20 percent of GDP.
