Fertiliser Association of Malawi has asked government to develop a clear and proactive plan to manage foreign exchange risks and protect suppliers from losses.
In its analysis of the 2024/25 Affordable Inputs Programme (AIP), the association said many suppliers struggled to settle remittances for imports from the previous season and bring in new consignment because of limited forex availability.
The association said the challenge is predictable as the agriculture season coincides with the traditional lean period for forex from October to February when commercial banks have limited foreign currency.
Reads in part the analysis compiled by the association’s executive administrator Hanna Makhambela: “Forex planning would also improve if the programme operated over a longer procurement window, reducing pressure on commercial banks and the Reserve Bank during the lean period.
“Additionally, easier access to financial instruments such as letters of credit and forward exchange rate contracts would help suppliers, especially newer and smaller ones, to secure funding and access dollars more reliably.”
Minister of Agriculture, Irrigation and Water Development Roza Mbilizi is quoted as having pledged that the government will fast-track delivery of farm inputs under this year’s Farm Input Subsidy Programme, the successor programme of AIP.
During the season under review, government had the contract in kwacha, but forex shortages delayed payments to international suppliers, affecting the timely arrival of fertilisers, forcing some suppliers to cancel their contracts.
Malawi’s annual fertiliser requirement is pegged at 450 000 metric tonnes.
