As Malawi continues to experience foreign exchange shortages, the Reserve Bank of Malawi (RBM) has demanded that 30 percent of forex realized from tobacco sales should be immediately sold to the bank.
In a letter to chief executive officer of Auction Holdings Limited (AHL), RBM governor Wilson Banda noted that the supply of foreign exchange in Malawi has been tight.
According to Banda, to address the foreign exchange shortages the bank introduced ‘export proceeds surrender requirement’.
In line with the policy, RBM has demanded AHL to immediately sell to the Central Bank 30 percent of foreign exchange generated on the tobacco auction floors. RBM will be buying the forex at the prevailing official exchange rate.
“Further you will be required to submit weekly returns to the RBM detailing the amount of tobacco sold on the floors and the amount of foreign exchange sold to the RBM,” Banda said in the letter dated 24 March, 2022.
The 2022 tobacco marketing season will open on 31st March, starting with Lilongwe Floors followed by the opening of Limbe Floors on 5th April.
Tobacco is Malawi’s major forex earner. Last year, the country earned $197.1 million (about K160 billion) from the sale of 123.7 million kilograms of all tobacco types.
In 2020, Malawi sold 114 million kilograms of tobacco and earned $174.97 million (about K143 billion).