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‘Used cars, kaunjika imports draining forex’

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Werani Chilenga

Reserve Bank of Malawi Governor Wilson Banda has said Malawi’s growing appetite for importing second-hand vehicles and clothes is draining forex in the country.

Banda was speaking in Lilongwe on Saturday when he appeared before the Joint Committee of Parliament on Trade, Natural Resources and Transport.

He said the imported second-hand items were eating up foreign exchange that could have been used for purchasing essential commodities.

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“The importation of used clothes, the importation of used cars, does drain quite a huge amount of forex. That does not mean we shouldn’t be importing those but we should all appreciate that there is a cost. There is an opportunity cost.

“Those items come in large quantities and have been identified as a major source of forex drain,” Banda said.

The governor also noted that the country is spending significant amounts of forex on servicing the foreign debt currently seen at $3.2 billion.

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Banda said the country cannot afford to default on the servicing of the debts at the moment.

He admitted that the central bank cannot afford to allocate forex to all sectors of the economy at the moment, noting that it is prioritising importation of essential commodities such as fuel, medicine, Affordable Inputs Programme and debt servicing.

On Saturday, the joint committee met officials from RBM, the National Oil Company of Malawi, Treasury, Malawi Energy Regulatory Authority, Ministry of Energy and all fuel importers.

Chairperson for the committee Werani Chilenga said after listening to various stakeholders, one thing that is coming out clearly is that Malawi is in a big forex problem.

He said the problem has been compounded by the huge foreign debt that the country has, which has to be serviced.

Chilenga said, as lawmakers, they have seen that the only way for Malawi to walk out of the forex conundrum is to do more on the export side so that the country realises more Forex.

Nocma Deputy Chief Executive Officer Hellen Buluma said last week the firm brought in about 8.9 million litres of fuel which is about 245 trucks into the country and that more fuel is coming.

Buluma said the strategy is to sustain the improvements registered so far.

She said Nocma is also sourcing fuel from Nacala and Beira, adding that Beira has about 10 million litres, which is about 300 trucks, which will help improve the availability of fuel products in Blantyre.

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