The Reserve Bank of Malawi (RBM) has blamed the country’s worsening foreign exchange crisis on structural economic weaknesses, telling Parliament that Malawi’s fuel import bill now far exceeds earnings from tobacco, the country’s main forex earner.
Appearing before Parliament’s Government Assurances Committee, RBM deputy governor Henry Mathanga said the country spends more than $700 million annually on fuel imports against less than $400 million earned from tobacco exports.
Mathanga said the growing gap between import demand and export earnings continues to pile pressure on the foreign exchange market and weaken the country’s reserves.
“The real issue is economic management,” he said, warning that exchange rate adjustments alone will not end forex shortages unless Malawi reduces imports and boosts export growth.
RBM also disclosed that it has started exporting gold as part of efforts to rebuild forex reserves, earning about $75 million from its first dore gold export sale in April this year.
The central bank, however, warned that declining donor inflows, gold smuggling, and the country’s growing dependence on imports continue to strain forex reserves and disrupt the formal foreign exchange market.
