The Tobacco Control Commission (TCC) has said the 20 week of the tobacco selling marketing season has so far earned the economy $333 million in revenue.
TCC chief executive officer Bruce Munthali said the mark is about 11 percent above the projected earnings of $300 million.
“The $300 million has been generated from 155.1 million kilogrammes of tobacco sold in the country this year an increase from 79.7 million kilogrammes during the same period last year which only earned $177.6 million this is an impressive development as we close Chinkhoma Auction Floors in Kasungu this week,” said Munthali.
The continued US dollar earnings from tobacco had an impact on the currency front as it boosted the Malawi Kwacha which as experienced stabilisation and at some instances it gained against other currencies.
On the larger picture tobacco has assisted to boost Malawi’s ailing forex reserves although this was not the case as of last week the reserves dipped modestly to US$485 million.
Malawi requires US$ 181.1 million per month of foreign exchange reserves, translating into a minimum three month requirement of US$ 564.3 million.
CDH Asset Management Research said this development mean Malawi has a deficit of $269.3 million (1.42 months of import cover) to meet the three month requirement of $564.3 million.
“Statistics as at July 16, 2013 indicate an 8.20 percent increase in official reserves from July 10, 2013 recorded value of $485 million (2.58 months of import) to $488 million (2.59 months of import cover).
“Nevertheless there was a 2.64 percent decline in private reserves from July 10, 2013 recorded value of $303 million (1.59 months of import cover) to $295 million (1.55 months of import cover) which was enough to offset the increase in official reserves, to lead to a 0.89 percent decline in combined official and private reserves to $781
million (4.15months of import cover) from $788 million (4.19 months of import cover),” CDH said.
The company further noted that inflows from tobacco proceeds, donors and foreign direct investments are expected to further boost the economy’s foreign reserves.