Malawi’s worsening foreign-exchange shortage is forcing the National Oil Company of Malawi (Nocma) to rethink how it secures fuel, with the State-owned importer seeking alternative payment terms, currencies, transport routes and financing arrangements to keep supplies flowing.
But economists and consumer rights advocates say the measures may ease immediate liquidity and logistical pressures without resolving the deeper foreign-exchange constraints that continue to undermine fuel security.
Nocma is seeking “440 000 metric tonnes of refined petroleum products—automotive gas oil and motor gasoline”–through a competitive tender covering the ports of Beira and Nacala in Mozambique and Dar es Salaam in Tanzania.
Tender documents issued on Thursday show that Nocma is inviting suppliers to propose alternative payment arrangements that could reduce immediate pressure on scarce United States dollars.
The tender lists options including open credit, collateral arrangements under which suppliers deliver fuel into Strategic Fuel Reserves and receive payment when the reserves are drawn down, as well as payment in currencies such as the euro, South African rand and British pound.
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“Malawi still faces low generation of forex, Nocma, therefore, seeks bidders with innovative solutions on payment terms,” the tender states.
It provides for a 180-day credit period, irrespective of fluctuations in global fuel prices during the supply contract.
The tender also introduces transport requirements aimed at maximising the use of local logistics.
For Dar es Salaam deliveries, bidders must use the Malawi Cargo Logistics (MCL) fuel depot and transport the fuel exclusively through Malawian transporters.
Fuel arriving through Beira must also be transported by Malawian operators, while Nacala consignments are, unless otherwise specified, to be moved by rail to the Lilongwe and Blantyre Strategic Fuel Reserves.
Transporters Association of Malawi spokesperson Frank Banda said the association would wait for the outcome of the tender, noting that foreign transporters are currently preferred in some fuel transportation arrangements.
University of Malawi macroeconomics lecturer Edward Leman said the strategy could be strengthened if Malawi also increased exports to countries from which it imports fuel, potentially allowing some transactions to be settled in local currencies.
He cautioned, however, that payment and sourcing innovations would not resolve the underlying causes of Malawi’s recurring fuel and foreign-exchange shortages.
“Put simply, we need to produce more and export more, while increasing the value of what we export. Our ability to meet import needs ultimately depends on the productive capacity of the economy and the foreign exchange that capacity generates,” Leman said.
Scotland-based economist Velli Nyirongo said the effectiveness of Nocma’s approach would depend on whether it improves access to foreign currency and lowers logistical costs rather than simply shifting the pressure elsewhere.
“The key benefit is therefore greater flexibility in sourcing and payment rather than a permanent solution to the dollar shortage,” he said.
Nyirongo said rail could reduce transport costs when moving large volumes, but infrastructure limitations, delays, handling charges and border costs could offset some of the savings.
Economist Marvin Banda said accepting a wider range of currencies could help manage foreign-exchange liquidity but would not generate new forex.
“Diversifying foreign-exchange liquidity is the immediate benefit, but not creating foreign exchange,” he said, questioning whether alternative currencies would actually be readily available.
Banda urged government to use the next 12 to 24 months to strengthen fiscal discipline, improve the foreign-exchange market, rebuild reserves and reduce avoidable import costs.
Consumer rights advocate Wazamazama Katatu said consumers would judge the strategy by whether it produced a tangible and sustained improvement in fuel availability.
He said using local transporters could make economic sense because payments to them would largely be made in local currency, potentially reducing demand for foreign exchange.
Centre for Social Concern economic governance officer Agness Nyirongo called for a broader foreign-exchange strategy centred on increasing exports, productive investment, tourism receipts, remittances, value-added industries and bringing foreign-exchange earnings into the formal financial system.
Nocma chief executive officer Engineer Emmanuel Matapa and other officials did not respond to phone calls seeking clarification on the availability of alternative foreign currencies and Nocma’s capacity to use them under the proposed arrangements.
The developments come as fuel queues have resurfaced and are lengthening in parts of the country, renewing concerns about the reliability of Malawi’s fuel supply.
Malawi consumes about one million litres each of petrol and diesel daily, translating to roughly 60 million litres of each product a month, or about 720 million litres annually.
