LILONGWE-(MaraviPost)-Malawi President Lazarus Chakwera’s Tonse government central back is slowly loosing control on policy rate direction as the local currency continues to depreciate.
Malawians therefore should brace for tough times as the Reserve Bank of Malawi (RBM has warned that local currency will continue to depreciate against other trading currencies due to continued shortage of supply of foreign exchange to the market.
RBM 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.
Consequently, last week Malawi Energy Regulatory Authority (MERA) raised fuel pump price with petrol jumping from MK830.60 to MK899.20; diesel from MK826.40 to K898.00 while paraffin jumped from MK613.20 to MK719.60 after another increase was effected a few months ago.
Minibus Owners Association of Malawi (Moan) thereafter 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 January Market Intelligence Report.
Former ruling Democratic Progressive Party (DPP) Spokesperson on Finance, Joseph Mathyola Mwanamvekha however 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 mainstream 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
“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 is now heading towards Baghdad, the Capital City of Iraq!
“ 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 them” Mwanamvekha said.
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.
Chakwera’s Tonse administration promises for better Malawi is slowly fading amid economic turmoil going through.