Minister of Industrialisation, Business, Trade and Tourism Simon Itaye says it is targeting to curb foreign exchange leakages as part of immediate measures to ease shortages affecting the economy.
Speaking on the sidelines of the 2026 Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Lakeshore Business Leaders’ Summit in Mangochi on Friday, he said some forex earnings are not being retained in Malawi, particularly in sectors such as tourism, limiting inflows.
Itaye said addressing the leakages is a short-term intervention while in the longer-term, government is focusing on import substitution to reduce demand for foreign currency and export diversification to increase inflows and reduce pressure on the forex market.
He said: “There are some areas that we are looking at because I think we should appreciate that some of the forex doesn’t come into Malawi.
“We are also looking at diversifying our exports, but there are some gaps here and there that we can fill and ensure that we continue to export.”
MCCCI immediate past president Wisely Phiri observed that frequent and unpredictable policy changes are undermining private sector confidence and foreign exchange generation.
He said exporters face challenges to access forex they generate, citing measures such as forex controls and export bans.
Said Phiri: “Government sometimes change policies overnight. For example, this forex we have created, we are moving it to the central bank or we are getting, for example, only 30 percent. What impact does that have on the people that are generating?
“We agree, we need to do more. But we are also saying, government, can you give us a platform whereby the people that are generating forex can have access to what they are bringing on the table?”
National Statistical Office data show Malawi’s trade deficit widened by 15 percent in 2025 to $2.67 billion (about K4.6 trillion) driven by rising imports and declining exports.
In its analysis, the World Bank argued that allocating foreign exchange at overvalued official rates to selected individuals, firms, industries and government entities grants the beneficiaries an implicit subsidy as they can obtain foreign currency for less than market value.
The bank said the dual framework distorts incentives, encourages exporters and other forex earners to bypass official channels by holding proceeds offshore or using informal markets, thereby constraining access to foreign currency.
Consistent with these dynamics, official forex reserves have not increased since the export surrender requirement was reintroduced in 2022 and remain just above one month of import cover or $250 million (about K437 billion), with economy-wide reserves equal to between two and three months’ coverage.
Since 2022, Malawi has been in a severe balance‑of‑payments crisis, with the Reserve Bank of Malawi (RBM) implementing several market interventions to avert the crisis.
In August last year, the RBM announced a reduction in the mandatory conversion rate for export revenues from 30 percent to 25 percent, with further reductions for qualifying companies anticipated.
In March last year, RBM also amended foreign exchange controls to promote import substitution and incentivise the export sector while curbing the use of informal sources of funds for importation.
