Reserve Bank of Malawi (RBM) says gold purchases and mining sector expansion stand to ease the country’s worsening foreign exchange crisis amid mounting pressure on the kwacha and shrinking import cover.
RBM Deputy Governor Henry Mathanga, speaking during an engagement with Parliament’s Government Assurances and Public Sector Reforms Committee in Lilongwe yesterday, said Malawi’s forex shortages reflect deep structural imbalances between imports and exports.
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“In the past, we could export enough. The import bill was not as high. The demand went up from 2022 to 2023… it has skyrocketed but the supply remains the same,” he said.
During the meeting, lawmakers pressed authorities on forex market management and urged government to strengthen State participation in mining exploration through the Malawi Mining Investment Company (Mamico).
Mathanga said part of the central bank’s strategy includes reserve diversification through strategic gold accumulation and stronger formal mineral trading systems.
He said Malawi’s annual fuel import bill now exceeds $700 million while tobacco earnings remain below $400 million, worsening pressure on forex availability.
“We depend on donors to plug the deficit. They are currently scaling down,” said Mathanga.
According to RBM’s February 2026 Monthly Economic Review, Malawi’s total foreign exchange reserves declined to $625.7 million in February from $664.9 million in January.
The reserves were equivalent to just 2.5 months of import cover, down from 2.7 months the previous month, although slightly above the $569.5 million recorded in February 2025.
The figures underscore growing pressure on Malawi’s external position and a major shift from the pre-2025 period when tobacco, agriculture and donor inflows largely stabilised forex supplies.
During the discussions, Lilongwe Lumbadzi legislator Dennis Kalekeni Chalera (Malawi Congress Party-MCP) questioned why the central bank had failed to decisively contain the parallel forex market.
Meanwhile, Lilongwe North legislator Monica Chang’anamuno, a former minister of Mining, urged government to finance Mamico to accelerate mining exploration and strengthen State participation in the sector.
In March this year, proposals emerged for government to allocate more than K100 billion towards mining-related activities with Scotland-based Malawian economist Velli Nyirongo warning that such financing could pile further pressure on Malawi’s already strained public finances.
The World Bank January 2025 Malawi Economic Monitor said the mining sector could generate about $30 billion in export earnings between 2026 and 2040 under a baseline scenario, with annual exports reaching around $3 billion by 2034.
The central bank has in recent months intensified strategic gold purchases as part of efforts to diversify reserves and reduce dependence on traditional export earners such as tobacco.
