Mutharika warned that the country is facing an “extremely difficult” economic crisis marked by fuel shortages, rising inflation and declining foreign exchange reserves.
Finance Minister Joseph Mwanamvekha said the government’s immediate priority is to restore the IMF programme, as foreign exchange shortages have left Malawi unable to secure critical imports. The crisis comes as the farming season faces delays and the country continues to rely heavily on tobacco, which accounts for nearly a quarter of annual foreign exchange earnings.
Speaking to Channel Africa on Monday, macro-economist and University of Malawi Lecturer Dr Bertha Bangara-Chikadza said Malawi’s challenges are long-standing and structural, not temporary shocks.
“We are an agricultural economy, but we are not exporting enough. We are importing three times as much as we export,” she said. “Every time we have a problem with rainfall or production, foreign exchange earnings slow, and that affects everything, fuel, food and medicines.”
She said Malawi’s dependence on smallholder farming, outdated methods and a narrow export base has left the economy extremely vulnerable.
“Agriculture is still using obsolete methods. We rely on smallholder farmers to feed over 20 million people and to generate the forex we need for all imports,” she said.
Bangara-Chikadza warned that with less than one month of import cover, Malawi cannot stabilise the Kwacha or meet basic needs without external support. Last year’s poor harvest has worsened food insecurity, pushing food prices higher and driving inflation.
She highlighted several long-term structural weaknesses: a persistent negative trade balance, lack of manufacturing and value chains, over-reliance on tobacco, and limited diversification into sectors such as mining, commercial agriculture and tourism.
“Commodity prices are volatile, and we do not control tobacco prices. Diversifying into mining and commercialised agriculture could help stabilise forex earnings,” she said.
Bangara-Chikadza argued that Malawi requires rapid and substantial support, not small, staggered disbursements.
“We need front-loaded disbursements under an Extended Credit Facility or a Rapid Credit Facility,” she said. “It must be enough to stabilise the currency, clear the critical import backlog and strengthen foreign reserves. Thirty million dollars is not enough for the kind of stabilisation we need.”
She added that unless reserves are rebuilt, continued Kwacha depreciation will worsen inflation and push more Malawians into food insecurity. Rising global fuel and fertiliser prices, tightening global financial conditions and high external debt have further strained Malawi’s economy.
“With tightening liquidity internationally, Malawi cannot borrow cheaply,” she said. “Fuel and fertiliser are coming in at higher prices, and servicing our debt is costing more. All of this is feeding domestic inflation.”
Bangara-Chikadza said urgent IMF support, combined with long-term structural reforms, is essential to stabilise Malawi’s macro-economy and avert deeper hardship.
–ChannelAfrica–
