We’re not generating forex, says Mathews Chikaonda
Press Corporation Limited group chief executive officer, Mathews Chikaonda, says the Malawi kwacha is losing its value because the country is still not able to generate enough foreign exchange to meet its import needs.
Chikaonda’s remarks come at a time when the Reserve Bank of Malawi has just moved in to control the kwacha fall by introducing new measures of determining the exchange rate value of the kwacha in a bid to restore the battered Malawi kwacha which as of yesterday was trading at K515 to the US dollar and as high as K530 on the black market.
The new measure restricts the authority of commercial bank in determining the foreign exchange market price.
RBM has blamed the kwacha fall on speculative trading by commercial banks.
But, according to Chikaonda, lack of diversification of the economy is crippling Malawi’s efforts to generate enough foreign exchange to meet its import demand.
“We need to accept our reality. Just because we are in the tobacco marketing season is not a guarantee that we will have enough foreign exchange. RBM needs to keep some for the rainy day,” he says.
He advises that instead of just being an importing nation, the government needs to seriously implement export diversification drives to help the economy cope during the lean period.
Earlier, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) blamed the ill fortunes in the economy on undesirable policies being advanced by the political leadership that are exerting pressure on consumption rather than production.
MCCCI chi e f executive Officer Chancellor Kaferapanjira said authorities are using cosmetic tactics to stabilise the kwacha when in reality the local currency was supposed to be weaker.
He said instead of lumping resources on unproductive initiatives like the fertiliser subsidy programme, government must instead incentivise the production sector to bridge the gap between production and imports.
Malawi’s headline inflation for March stands at 18.2 percent as reported by the National Statistical Office. Government is targeting to reduce the figure to 15 percent by June next year.