Tobacco rakes in K170bn as Chakwera administration takes measures to ease forex shortage
Officials from Tobacco Commission say tobacco has raked in K170 billion as of July 15, 2022.
Tobacco Commission (TC) Spokesperson Telephorus Chigwenembe said this year farmers have enjoyed good prices despite the volumes of tobacco being low.
“This year the average price has been on the higher side than it was during the last selling season,” said Chigwenembe.
The TC has since described this season as a success as farmers have enjoyed good prices from the onset of the market.
Meanwhile, TC has disclosed that this year’s tobacco marketing season will close on 12th August.
“Chinkhoma Auction Floors in Lilongwe and Limbe will close on 5 August while Mzuzu will end the season on 12 August,” said Chigwenembe
According to Chigwenembe, Mzuzu will be the last to close because there are still significant volumes of tobacco flowing to the floors.
Records indicate that Malawi raked in K160 billion during last year’s tobacco marketing season.
Meanwhile, minister of Finance Sosten Gwengwe said Malawi is expected to raise funds amounting to $500 million, an equivalent of K513 billion, through loans and grants to be acquired from different partners for various projects to ease forex shortage.
According to RBM, the county’s official gross foreign exchange reserves in the first quarter of this year 2022 stood at $374.48 million, a drop from $429.17 million in the fourth quarter of 2021.
With the news broken by the Minister of Finance about injection of forex through grants and loans, most business operations are likely to normalise, domestic production for export will resume, so too importation of various goods including raw materials.
Malawi recently announced a 25% devaluation of its national currency, the kwacha, in a bid to shore up dwindling foreign exchange reserves and curb inflation.
The declaration was made as government launched recovery package talks with the International Monetary Fund (IMF).
The devaluation, the biggest in a decade, will take effect to normalise the Kwacha with a Dollar as reported by the Central Bank of Malawi.
The last devaluation of the kwacha (33%) was effected in 2012.
For six months, Malawi has seen its foreign currency reserves shrink sharply due, according to the Central Bank, to a drop in export revenues due to the Covid epidemic and a rise in the cost of imports, particularly raw materials, due to the war in Ukraine.
The country was also hit by two devastating cyclones in 2022.
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