Malawians should brace for tough times as the Reserve Bank of Malawi (RBM) has warned that local currency, the kwacha will continue to depreciate against other trading currencies due to continued shortage of supply of foreign exchange to the market.
The central bank says continued shortage of supply of forex will trigger a further depreciation and this will likely raise the non-food inflation through high costs of imported goods including fuel.
Last week, the Malawi Energy Regulatory Authority (MERA) raised fuel pump price with petrol jumping from K830.60 to K899.20; diesel from K826.40 to K898.00 while paraffin jumped from K613.20 to K719.60 after another increase was effected a few months ago.
Minibus Owners Association of Malawi (Moan) responded by hiking bus fares by 10 percent, straining Malawians economically further.
“The continued shortage of supply foreign exchange to the market is expected to trigger a further depreciation of the exchange rate in the near term, thereby raising non-food inflation through high costs of imported goods including fuel,” reads RBM’s Market Intelligence Report.
Meanwhile, former ruling Democratic Progressive Party (DPP) spokesperson on finance, Joseph Mathyola Mwanamvekha, observed that the Tonse Alliance government is no longer instilling confidence in Malawians as the leadership has deviated from the promises it made during the campaign.
Mwanamvekha also recently attracted headlines in the media when he said The Tonse Alliance Government has lost direction and is headed to the war torn country of Baghdad in Iraq instead of the promised Canaan.
“The fuel price increase is no good to a local man as prices for basic needs will rise and the depreciation of Kwacha will worsen the business community who depend on importation of goods including car dealers.
“The depletion of the import cover will see government failing to order the necessities like drugs and other medical supplies,” said Mwanamvekha.
“Time is the best judge, I feel vindicated almost six months down the line, it is sad to note that Malawians are still hopeless as the new captain they entrusted with the responsibility to steer the ship has met a storm and hit a rock in the process and subsequently lost the direction instead of going to Canaan [in Egype] is now heading towards Baghdad, the Capital City of Iraq, “ he said.
Mwanamvekha, who wants to be DPP’s torchbearer in 2025, said he will continue crisscrossing the country to appreciate challenges Malawians are facing.
“ I have been going round the country in all the districts meeting the citizenry and not only the DPP members but different stakeholders to appreciate their economic hardships they are facing while giving them a message of hope that come 2025, DPP is there to rescue the.”Mwanamvekha said.
Mwanamvekha—trained economist—has held many senior positions in both private and government, including to Secretary to Treasury, CEO for different commercial banks.
And during his time as Minister of Finance, Malawi saw the Kwacha being stable at 735 against the US Dollar, inflation coming down from 31% to a single digit, interest rate from 41% to 14% and the import cover from one month to six months.Follow and Subscribe Nyasa TV :