Malawi’s gross official reserves have climbed to an equivalent of 2.6 months of import cover buoyed by the foreign exchange injection from tobacco sales.
Reserve Bank of Malawi (RBM) published statistics indicate that the country was sitting on foreign exchange buffer worth $492 million in gross official reserves as at July 25 2013 which is an equivalent of 2.62 months of import cover.
Such an accumulation is a slight improvement as gross official reserves on 24th July had amounted to $485 million, an equivalent of 2.58 months of import cover.
The country consumes $188.1 million monthly such that the prevailing build-up in the foreign exchange will likely help the country-which has in the recent past been facing a critical foreign exchange shortage-meet its import demand of strategic imports such as fuel, fertilisers and pharmaceuticals.
The country also needs adequate foreign currency to help service foreign debt and also pay government expenditure overseas, among other key importance of foreign exchange.
Corroborating the figures, the Tobacco Control Commission (TCC) chief executive officer Bruce Munthali said in an interview on Tuesday that it is evident that tobacco marketing this year has unleashed more foreign currency on the market which he said has helped to accelerate the recovery of the economy.
“Revenue from tobacco this year has been a milestone and signs of success of this year’s market are visible. The crop has significantly helped in the economic recovery programme which is being implemented by government,” said Munthali.
He said already the market has realised over $333 million in the twenty weeks of trading which he said is almost double the revenue accrued from the leaf last year.
Last year, the country witnessed one of the worst tobacco marketing season which saw the country earning $177 million from tobacco, down from about $292 million earned in the preceding year of 2011.
Munthali, who said the tobacco market is still progressing well, said the only challenge with the commission is on the logistics to prepare for next year’s tobacco season.
During a 2012 tobacco annual congress held at Sunbird Nkopola Lodge in Mangochi last year, the Ministry of Agriculture and Food Security in conjunction with tobacco industry experts had set a target of $300 million as expected earnings from Malawi’s main export crop.