United Democratic Front (UDF), president Atupele Muluzi has warned that Malawi’s economic recovery could remain difficult unless the country urgently addresses its foreign exchange shortage.
Muluzi made the remarks on Monday in a message to Malawians, saying the forex crisis is contributing to fuel shortages, rising prices, unreliable electricity, medicine shortages, business difficulties and unemployment among young people.
He said Malawi needs about US$3.3 billion annually to meet its import requirements for fuel, fertiliser, medicines and other essential goods but generates only about US$1 billion from exports, creating a gap of approximately US$2.3 billion.
Muluzi also raised concern over the disparity between the official and parallel market exchange rates, saying the official rate is around K1,800 per US dollar while the parallel rate is about K4,000.
According to Muluzi, the exchange rate gap is worsening forex shortages, increasing the cost of goods and services and discouraging investment in the country.
He welcomed government discussions with the International Monetary Fund and World Bank but said Malawi must do more than rely on external financial support to address its economic challenges.
Muluzi proposed his ‘Business First’ approach, which he said would support careful liberalisation of the exchange rate while encouraging investment in mining, energy, tourism, agriculture and manufacturing.
He argued that Malawi needs to increase production and foreign exchange earnings instead of continuing to depend heavily on borrowing to finance the economy.
“We cannot continue borrowing our way out of the crisis. We must produce more, attract investment and create opportunities for our young people,” Muluzi said.
He said the economic crisis should not be treated as a political issue, arguing that urgent reforms are needed to create jobs, improve access to essential goods and secure a better economic future for Malawians.