The Reserve Bank of Malawi (RBM) has downplayed fears over interruption of fertiliser supplies due to forex scarcity, saying foreign exchange will be made available for the cause.
This comes at a time the 2022-23 farming season has already commenced while the government remains mum on the Affordable Inputs Programme arrangements. Private fertiliser importers also lament forex scarcity as a limiting factor.
The Fertiliser Association of Malawi, for instance, lately expressed fear that the foreign exchange instability will knock on the importation of the commodity, which is essential in agricultural production.
But speaking on Saturday when gracing the 10th CDH Investment Bank anniversary celebration in Blantyre, RBM Governor Wilson Banda said fertiliser is among priority products for forex allocation. Other commodities include fuel and medicines.
“[The] government is lining up facilities that will be used to import fertiliser. Those facilities will be obtained from commercial banks and we should not lose sleep over that because it is a tight situation but we have made sure that strategic commodities should be imported,” he said.
Malawi has been struggling with foreign exchange scarcity and the ugly head has been seen especially in the importation of fuel, which has become scarce lately.
In May this year, the Kwacha was devalued by 25 percent, a development which the RBM governor said aimed at giving the currency its true value and aligning it with the then trends.
The devaluation, however, seems not to have yielded the desired results as foreign exchange continues to be scarce, affecting the Kwacha’s footing against other currencies, trading around K1,300 from less than K1,100 when it was just devalued to a dollar.
Banda then faulted what he called glaring mismatches between imports and exports.
“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,” he said.
Meanwhile, Fertiliser Association of Malawi has expressed worry over the continued scarcity of forex, saying it could heavily affect agricultural output this season.
The association’s spokesperson Mbawaka Phiri said if the situation does not change, the fertiliser may go to other countries.
“There are enough stocks positioned at the port but we need to procure it using dollars before it is diverted to other countries in the region,” she said.
Malawi is a predominantly importing and consuming nation, heavily dependent on exporting raw agricultural produce, with tobacco being the main export earner.
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.