Malawi and United Arab Emirates (UAE) yesterday launched talks which Trade and Industry Minister Sosten Gwengwe said could help ease foreign currency pressures currently crippling critical imports such as fuel and fertiliser.
The disclosure came after top Capital Hill officials’ closed-door talks with a high-level UAE delegation in Lilongwe aimed at finalising a government-to-government (G2G) fuel procurement agreement and establishing a development bank.
Briefing journalists at the Office of the President and Cabinet (OPC) in Lilongwe yesterday evening, Gwengwe described the proposed G2G fuel arrangement as a “pragmatic solution” to the country’s forex shortages.
Said the minister: “The UAE team’s visit is a direct response to the forex challenges Malawians face. The deal will ensure consistent fuel availability for the private sector and reduce speculative market behaviour.”
Asked whether a new development bank will be established or the two governments will inject more capital into the already existing Malawi Agriculture and Industrial Investment Corporation, a public-private sector development bank, Gwengwe said the issue is yet to be discussed.
The UAE delegation, led by director of Investment Legislation Management Abdalla Alobeidili, declined to speak to journalists after the talks.
Other members of the delegation included director of policies Abdalla Ahmed Ibrahim; manager, government and sovereign relations at the Abu Dhabi Developmental Holding Company (ADQ) Abdulrahman Abdulla Naser Salem Alshkelli and specialist for foreign direct investment Ayesah Saleh Mohammad Ramadhan Alrafi.
Meanwhile, the delegation is today set to continue sector-specific discussions on energy, agriculture and transport, among others.
In an interview yesterday, Economics Association of Malawi president Bertha Bangara Chikadza said expectations are high that arrangements like these can be made for other strategic commodities such as fertiliser to ensure timely availability of the commodity to those who need it. She said this would consequently help eradicate the chronic food insecurity in the country.
She added that the G2G arrangement is the way to go because it allows for longer-term foreign exchange trading instruments, which give the country a breather to pay later while having constant supply of the strategic commodities.
Said Chikadza: “Therefore, this removes or minimises speculative behaviour and also removes the need to have forex readily available at the time of purchasing the fuel.”
However, Centre for Social Accountability and Transparency (Csat) executive director Willy Kambwandira said celebrating the deal is premature, arguing that talks have been shrouded in secrecy, and Malawians deserve full disclosure of terms.
“Without transparency, speculation and accountability gaps will persist,” he warned.
In December last year, President Lazarus Chakwera met UAE leader Sheik Mohamed bin Zayed bin Sultan Al Nahyan and asked for that country to help Malawi end her persistent erratic fuel supply.
Said the President: “I have relentlessly continued to engage the Government of the United Arab Emirates on issues of bilateral importance, chief among them is the security of fuel supply following the transition to a government-to-government arrangement.”
Late last year, the government procured 40 000 metric tonnes (about 51.5 million litres) of a combined cargo of diesel and petrol from Abu Dhabi, UAE, under the Kenyan government bilateral arrangement.
Some of the fuel is at the port of Tanga in Tanzania from where it is being hauled into Malawi.
