Reserve Bank of Malawi (RBM) announced new measures to shield the kwacha and sustain foreign exchange reserves as tobacco sales taper off. RBM spokesperson Boston Maliketi Banda said the strategy aims to reduce Malawi’s reliance on seasonal inflows by formalizing mineral revenue, linking banks with exporters, and cutting the mandatory export surrender requirement from 30% to 25%. An electronic forex tracking system and tighter compliance checks on authorized dealer banks are also being introduced to curb illicit trade.
The announcement follows a strong mid-year performance, with July’s trade deficit narrowing to $173 million and reserves climbing to $607.7 million, equal to 2.4 months of import cover. Tobacco alone has earned $525.4 million in 24 weeks, but RBM figures show the country’s cumulative trade deficit for January–June reached $1.6 billion, up 15% year-on-year. Economists caution that the gains could quickly erode once the season ends.
“This is temporary relief,” said Scotland-based economist Velli Nyirongo, warning that without structural reforms and export diversification Malawi risks sliding back into wider deficits.
