Data from the Reserve Bank of Malawi (RBM) paint a deceptively sunny picture: the country’s total foreign exchange reserves are rising, hitting $616.3 million, an equivalent of 2.5 months of import cover in June.
Yet, this still falls short of the critical three-month macroeconomic benchmark of $750 million to $800 million. In other words, these figures are heavily padded. Instead of explicitly separating gross official reserves from private sector holdings comprising commercial bank deposits and Foreign Currency Denominated Accounts, the RBM now lumps them into a single, rounded headline number.
If we take this data at face value, import cover has increased from the two-month average recorded before the September 16 2025 General Election that returned President Peter Mutharika to power as Malawi’s seventh Head of State.
During his inauguration, the President was visibly energised to reclaim the office he lost in the court-sanctioned 2020 fresh election, a process he famously condemned as a “travesty of justice” and a “judicial coup d’état.”
However, his triumph was immediately sobered by an economic reality he described as being in the intensive care unit: “ili pa oxygen.”
That the Malawian economy is on life support is indisputable as an Institute of Public Opinion and Research (Ipor) survey conducted in July 2025 revealed that 90 percent of Malawians viewed the economy as being in a “very bad state”.
Since 2020, forex scarcity has turned Malawi into a land of permanent shortages. Manufacturers cannot clear raw materials, and hospitals lack essential medicines.
If the RBM’s data claims reserves are rising, we must ask: Where is the cash? Why has an acute fuel scarcity completely paralysed commercial activity over the last fortnight?
At his inauguration, Mutharika promised emergency interventions to tackle the ‘Four Fs’, namely food, fertiliser, foreign exchange and fuel. On Sunday, marking his first anniversary in office, he used an exclusive interview with the taxpayer-funded Malawi Broadcasting Corporation to rate his performance at 50 percent, claiming credit for stabilising the economy.
But out of the ‘Four Fs’, fuel and forex remain broken. Importers are trapped on the parallel market, paying exorbitant black-market rates for greenbacks and driving commodity prices through the roof.
Fulfilling the Malawi 2063, the country’s long-term development strategy that envisages diversification of export products within the agricultural sector and towards other sectors, including mining and tourism as having potential to make a difference, requires aggressive export diversification into mining and tourism.
Immediate survival dictates procurement efficiency. Right now, our fuel and fertiliser supply chains are weighed down by bloated overheads and corrupt middlemen, the infamous dobadobas some of whom attempted to source fertiliser from a butchery not long ago.
The World Bank recently prescribed a brutal reset: strict fiscal and monetary tightening before unifying the exchange rate into a market-determined system. In response, the RBM has fired off a barrage of directives to plug the leaks.
But the formal market remains completely starved. Even our crucial “tobacco dollars” are bypassing official vaults as some growers are feeding the parallel market directly by inflating invoices to finance non-essential imports such as used motor vehicles for third parties.
The liquidity exists on an RBM spreadsheet, but it never lands in our authorised dealer banks.
When all is said and done, the question echoes across empty fuel stations: Where is the forex?
Numbers do not lie, but I am also always mindful that liars certainly know how to use numbers to make believe.
