Economics and agricultural experts are urging the Reserve Bank of Malawi (RBM) devalue the kwacha during this tobacco selling season to raise up the dwindling leaf prices that has put farmers in anxiety.
Professor of economics at Chancellor College Ben Kalua said the government, through the Reserve Bank of Malawi should consider devaluing the kwacha to help tobacco farmers realise better tobacco prices.
He said the tobacco industry is the back bone of the agriculture industry therefore hurting it through unfavourable tobacco prices would further cripple the already sick economy.
Chairman of the Agriculture committee of parliament Felix Jumbe said his committee has since been granted a meeting with the Reserve Bank governor Charles Tchuka and his officials on the same issue.
“We have been seeking a meeting with the governor and finally we have been granted, probably we will meet him next week. We want them to consider a devaluation to raise the tobacco prices which are now pathetic. I hope they will understand our point,” said Jumbe who had been waging a lone battle against the appreciation of the kwacha just before the auction floors opened on Wednesday.
As of Thursday, two days into the selling season, the highest leaf fetched US$1.54 per kilogramme and the lowest was at 80 cents per kilogramme.
President of Farmers Union of Malawi says the farmers did the farming nd took huge bank loans when the kwacha was trading K1000 against the dollar but now it has appreciated to US$600 which means the farmer is making huge losses.
Central bank officials were not available for comment but in earlier interviews Finance minister Goodall Gondwe ruled out devaluation of the kwacha.
He said the devaluation of the kwacha cannot be the only solution to the low tobacco prices as it will as well affect other sector of the economy and would make all efforts to fix the economy worthless.