The government says the current foreign exchange (forex) revenue generated from tobacco sales is insufficient to sustain the funding required for fuel procurement and other strategic imports.
Minister of Information Moses Kunkuyu told The Daily Times Thursday that the country is still facing fuel shortages because earnings from the current tobacco market season are not enough.
“It is the same as why we may struggle to pay school fees for our children even when we are receiving salaries. It is a question of how much forex is needed to buy fuel, medical supplies and other major imports versus how much the tobacco sales are bringing in,” Kunkuyu said.
He added that it is important to understand that even if the government were to allocate every dollar realised from tobacco sales, the country still could not meet the full cost of fuel importation alone.
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However, Kunkuyu said the government is aware that the permanent solution to the shortage of any imported commodity lies in the generation and sustainable availability of forex.
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“The efforts being made by this administration to transform Malawi into a producing and exporting country will bear fruit and future generations will live to appreciate it,” he added.
Kunkuyu further said that, in the meantime, the negotiated credit terms with suppliers and government-to-government arrangements are providing temporary relief.
Commenting on the matter, Centre for Social Accountability and Transparency Executive Director Willy Kambwandira said that unless systemic economic reforms are implemented, Malawians should expect occasional fuel shortages.
“We appreciate the government’s efforts to address the sugar shortage crisis through measures such as institutional reforms, pricing controls, enforcement and imports. However, the situation on the ground remains critical, with ongoing shortages and inflated prices,” Kambwandira said.
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He further said that more immediate and decisive actions—such as halting sugar exports, expanding crushing capacity and tightening border controls—are still necessary to address the crisis.
The country is currently experiencing fuel and sugar shortages, which the government has attributed to the current forex challenges.
The current tobacco marketing season is reportedly underperformed compared to last year, with significant declines in earnings, volumes and average prices recorded in the opening weeks of sales.
Statistics from AHL Tobacco Sales for the eighth week showed that the country has generated $178.4 million from selling 72.7 million kilogrammes (kg) of tobacco between 9 April and 30 May.
This represents an 18 percent revenue drop from the $218.7 million earned during the corresponding period in 2024.
Tobacco is Malawi’s major export crop and foreign exchange earner. At the end of the 2024 tobacco marketing season, the country realised $397 million after selling 133.37 million kg at an average price of $2.98.
However, in recent years, the industry has faced challenges to grow including extreme weather conditions, high cost of production and lack of competition among buyers on the market aside anti-smoking lobbies.
