Sunday, March 26, 2023

Forex for affordable farm inputs available says Reserve Bank of Malawi


Contrary to prophets of doom reports, the Reserve Bank of Malawi (RBM) has said that it has the requisite forex to buy fertilizer for the downplayed fears over the interruption of fertilizer for the affordable farm inputs (AIP) program this farming season.

Reserve Bank Governor Wilson Banda made the assurance on Saturday when he graced the 10th CDH Investment Bank anniversary celebration in Blantyre stating that fertilizer is among the priority products for forex allocation. Other commodities include fuel and medicines.

“[The] government is lining up facilities that will be used to import fertilizer. 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.

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