Financial Market Dealers Association of Malawi (Fimda) president Leslie Fatch has commended the Reserve Bank of Malawi (RBM) for amending foreign exchange controls to incentivise exporters and boost foreign exchange reserves.
But he said they regard the changes in licensing as administrative for continued oversight by the central bank as a regulator, as such, they will wait to see the effectiveness in the implementation.
Said Fatch: “We have been advocating for a review of the retention policy for the non-governmental organisation [NGO] receipts, so the changes made will improve the forex liquidity compared to the initial regulations, which were effected in December 2024.”
He commended the RBM for being responsive to the call and hope that such responsiveness will continue depending on the foreign exchange situation on the market.
“We also commend the authorities for the revision of the requirements in the retention ratio for exporters, which has now provided for potential exemptions for manufacturing exporters, a move that incentivises production and export of manufactured goods,” said Fatch.
In a communication to Bankers Association of Malawi executive director Lyness Nkugula dated March 25 2025, RBM Governor MacDonald Mafuta Mwale said the review will promote import substitution and incentivise the export sector while curbing use of informal sources of funds for importation.
Among others, he said the central bank has reduced the mandatory conversion ratio on export proceeds from 30 percent to 25 percent for exporters with exemption from the mandatory conversion of export proceeds for manufacturers meeting criteria issued by the central bank.
The RBM has also reduced the mandatory conversion ratio from 70 percent to 50 percent for NGOs and introduced a verification requirement for importers to demonstrate that their imports have been financed through the formal banking channel.
RBM has also reviewed authorised foreign exchange dealer licensing tenure.
Bakhresa Malawi Limited head of human resource and compliance manager Richard Tchereko, whose firm is one of the exporters, said in an interview that removing 30 percent compulsory conversion for exporters can help honest tax-paying companies to compete with informal and illegal exports.
Forexavailability is expected to improve when the tobacco marketing season opens on April 9 at Lilongwe Auction Floors.
