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.

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.