Private fuel importers consortium, Petroleum Importers Limited (PIL), has said it is engaging the government to consider barter trade for fuel imports with commodities such as precious stones and metals.
This comes amid intermittent supply of fuel in some parts of country, partly attributed to the foreign exchange woes.
As at June 30, 2022, Malawi’s gross official reserves were seen at $415.73 million or 1.66 months of import cover, which is below the internationally recommended three months’ cover.
According to PIL General Manager Martin Msimuko, there should be combined efforts with the government on structuring policies to enable commodity traders to benefit from Malawi’s exports of produce, precious stones and metals and supply fuel in return.
Msimuko added that government should realise that fuel is an imported commodity and its availability much depends on the availability of foreign exchange in the country therefore such exchange policies will ensure consistent product supply.
“We are also engaging with government on policies which will enable good returns on investment for private sector importers to have larger storage facilities and hold inland stock which requires substantial capital. This would ensure product is always available even in cases where we have challenges due to external factors,” he added.
On the current status of fuel, Msimuko said the consortium has managed to source adequate financing of over $70 million through local commercial banks.
“We will continue to support Malawian transporters and businesses as part of our supply chain so that we use the little foreign exchange for importation of the product and all other service providers will be paid locally in Malawi Kwacha. We will continue with our pioneering spirit in ensuring that more products being brought into the country by rail,” Msimuko added.
Mining expert Grain Malunga said the idea may not be viable for now because Malawi does not have reserves from commodities such as precious stones and metals.
“The RBM has some gold but it is not processed to be exchanged for commodities and gemstone is in the hands of artisanal minors who are just selling it anyhow therefore exchanging fuel with such commodities is not an immediate solution,” he said.
Ministry of Mining Public Relations Officer Andrew Mkonda Banda asked for more time before commenting on the suggestion.
Different studies have shown that Malawi has precious stones such as gold, gemstone and even diamond which are being underutilizing and benefiting illegal minors who bypass government processes in selling.
Addressing the nation last year, President Lazarus Chakwera said, if revamped, mining is the next big thing that can be the backbone of the Malawi economy.
Due to the foreign exchange scarcity, the country has been grappling to import other essential commodities like fertiliser.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.