By Our reporter
Some financial experts have expressed their dissatisfaction and worries on how government is handling issues of fuel shortages in the country describing it as a joke.
The development follows the outcome of the Wednesday’s government presser on fuel shortages.
Government said the problem is due to low fuel supply which has been affected by forex shortages and that the M1 road around Chiweta was impassable for trucks.
“For ten days, suppliers stopped ferrying fuel because government failed to pay them. But we have disbursed some cash and we are about to obtain a $100 million facility from the Arab Bank for Economic Development in Africa for the same,” said Moses Kunkuyu who is government spokesperson.
However, a renowned financial expert as well as fuel consultant, Dr. Paul Gadama and a Mzuzu based financial analyst, Jackson Caesar-Msiska said number of the solutions that government have been providing have failed the country miserably.
According to them, the short term solutions for example have been the same and unfruitful.
Gadama said government is acting as it not aware that fuel scarcity is driving up transportation costs, food prices and business expenses which are contributing to sharp rise in inflation.
“The impassable of M1 road around Chiweta is an old song, so is the forex shortages. Soon you will hear the same song. We are just stuck as a country as far as fuel issues are concerned,” said Gadama.
Gadama said government need to negotiate with oil exporting countries, potentially entering forward agricultural contracts for next year’s produce.
“By offering future agricultural output in exchange for fuel, Malawi could secure critical fuel supplies without putting additional strain on the country’s already depleted foreign exchange reserve. This strategic approach would also help ensure a steady income stream for future, addressing both immediate shortage and the forex issue simultaneously,” he said.
He further urged government to prioritize forex allocation for fuel importers in collaboration with financial institutions.
“Additionally, a reduction in foreign travel by high ranking officials could help to preserve forex as these trips often lead to an influx of currency into the black market, further distortion the value of Malawi Kwacha,” he added.
Apart from that, Gadama said government should encourage private sector investment in fuel storage and refining facilities.
On long term solutions, Gadama said that Malawi should diversify its export base by moving beyond reliance on tobacco but focusing on agriculture, mining and manufacturing in order to boost forex reserve.
“Government must also invest in public transport infrastructure. Expand bus and train network would significantly reduce fuel demand. Apart from that, government should also promote electric vehicles,” he disclosed.
Msika on his said government should stop relying on loans.
But Minister of Information who is also government spokesperson said they’re doing everything to eliminate the problem through short and long term measures.
The current fuel shortages is expected to end this weekend according to government.
