Malawi’s Economic Planning and Development Minister Ralph Jooma has allayed fears that the Kwacha which is reportedly appreciating against the United States dollar will again start depreciating soon after the tobacco selling season, saying the government has already put measures to protect the currency from losing value after the tobacco marketing season.
He was responding to the fears from some economists and consumer rights groups who have warned Malawians against being overexcited with the appreciation of Malawi kwacha saying it is a temporary relief as tougher times will rebound soon after the tobacco selling season.
They are attributing the appreciation of the kwacha to foreign exchange inflow from the ongoing marketing season of tobacco which contributes over 70 percent to the country’s foreign exchange earnings.
Local monetary authorities indicate that the kwacha which has been depreciating since President Joyce Banda devalued and floated the currency has now stabilized at K380 to a dollar from the previous K420 to United States dollar.
Jooma told a local radio Capital FM on Monday that the currency appreciation is because of the government’s economic policies under the much touted Economic Recovery Plan (ERP). He also said the government is not heavily relying on tobacco alone for the foreign exchange earnings.
“We are not relying on tobacco. You must also know that we have heavily invested in legumes which have ready market in the region or beyond that. We’re making sure that after tobacco season we should not have a lean period and continue to earn foreign currency,” he said.
He said the intention of putting agriculture diversification program as one of components of Economic Recovery Programme was to make sure that that country should not have a lean period after tobacco.
President Banda last December launched the National Legume Seed distribution in central district of Kasungu as a part of the Presidential Initiative on Poverty and Hunger Reduction which saw over 100, 000 small farmers receive legume seeds such as ground nuts, beans and pigeon peas on loan.
She said if property managed the initiative can compete with tobacco and serve as an exit strategy to farm input program which she observed that it only serve few farmers adding that the government had already secured markets for legumes produced under the initiative.