Forex shortage hits Malawi cement companies: Minister Gwengwe warns against price hike

A lack of foreign currency is causing the recent shortage of cement in import-heavy Malawi, according to Minister of Trade Sosten Gwengwe.

Minister Sosten Gwengwe: Forex shortage 

Gwendwe said on Wednesday that cement companies lack the necessary foreign reserves to maintain production.

Addressing the media in Lilongwe, Gwengwe warned cement traders against increasing prices beyond K7 500 which is recommended in the current prevailing economic situation.

The Minister’s remarks follow a meeting with cement manufacturing companies and importers that aimed to find solutions.

Gwengwe has warned that unscrupulous traders who are taking advantage of cement scarcity to raise prices will have their licenses revoked.

The Minister said cement producers such as Shayona Cement Limited, Cement Products Limited and Lafarge have not raised prices but traders are taking advantage of the situation.

Gwengwe said discussions with the Reserve Bank of Malawi have taken place to prioritise issuing forex to cement importers to deal with the challenge.

Recent weeks the local market has experienced rising prices of cement reaching up to about K10 000 per bag.

Malawi’s systematic decline in foreign exchange reserves has been a prevailing theme for years now, despite efforts from various parties to maintain the balance between supply and demand.

The  nation could be in for intense hardships  and desperately needs to build reserves back up for obvious reasons, but perhaps most significant is proving to foreign investors and donors alike that the corruption seen in the past will remain in the past.

For the time being, international aid is not a sustainable solution to foreign exchange woes, and the nation must prove that it has more to offer the world than just tobacco.

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Lawrence Phiri
8 months ago

May be the producers funded MCP-UTM into government then it’s Pay back Time .who knows.

Steaka Mwale
Steaka Mwale
8 months ago

Hon Minister some advise from a CEO of a cement company in USA. To minimise price, to maintain a standard price and to ensure continuity of supply. First only allow Lafarge to import cement. Second immediately introduce price control for cement.

Shonai
8 months ago

No lame excuses.Peter Managed the economy without doners support,amid two disasters,.Fuel was everywhere, managed two elections built so many roads using our own money.Mwano mukumuchitira Peter.Mulungu atilanga nao.

Che Bauleni
Che Bauleni
8 months ago

Muziwona a tonse alliance simunati .Malawi mumamufuna mutalamula uja ndi ameneyi

Jason Mlowoka
Jason Mlowoka
8 months ago

This can’t be true, there are a lot of technocrats in the alliance who should be able to turn around the economy. Is the vice president not an economist who singlehandedly played his economic tricks to keep the telecom company alive? As always said, he is a practical man not a theorist. So within 2 months you guys have cleaned the coffers and brought the economy on its knees? Koma kumenekooo!!
Chitsime chimadziwika kuya/kuzama kwake [email protected]%*&””

ignatius
8 months ago
  • Honourabl Gwengwe the principles of Supply and Demand determine the prices of products, dont threaten traders with those intonations mwina instead of castigating and arresting the DPP think thanks work together as one Malawi, nanga zikuyendapo apa
Patriot
Patriot
8 months ago

Should we say it’s only DPP who know how to play the forex and Kwacha stability well? Is it through magic kapena school yawo ya economics ndi yosiyana ndi ya achina Gwengwe and Mlusus?I’m now getting worried. Be careful Tonse. We may soon start comparing the evil thieving government of DPP to the innocent Tonse government that is bringing misery to the populace. Having Cement prices rise with K2500 within a month is a of point of concern and is showing that you guys have lost control of affairs already. You better tread carefully or we will have a president… Read more »

Xyz
Xyz
8 months ago

Honorable Minister, You need to know that cement traders have fixed costs as well, which is distributed against the number of bags they sell. If a trader sells 10,000 bags a month and has fixed costs of K3 million a month he averages K300 per bag as his fixed costs now this same trader can’t access 10,000 bags a month due to the shortages and only accesses 3,000 bags so automatically he has no option but to up the price of cement as his fixed costs has gone up to K1,000 per bag from K300 a bag plus he needs… Read more »

mussa lambat
mussa lambat
8 months ago

tonse govt open borders to cement from zambia and tanzania. this will force companies to be competitive and reduce prices. how can malawi cement cost$10 a bag when sadc average is $5. profiterring wil only stop when markets are open to free and fair competition.

Just
Just
8 months ago

kwacha iphofomoke tsono. zachisoni

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