Minister Kawale says forex scarcity, kwacha devaluation have affected AIP implementation

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Minister of Agriculture Sam Dalitso Kawale has disclosed that scarcity of foreign exchange (forex) and the recent 44 percent devaluation of the Malawi kwacha have negatively affected the implementation of this year’s Affordable Input Programme (AIP).

Kawale has made the sentiments through a statement he shared with us via WhatsApp on Wednesday.

He said the implementation of the programme started very well until the country started experiencing acute shortage of forex, which has recently been compounded by the recent realignment of the kwacha to major trading currencies.

Some five weeks ago, President Dr. Lazarus McCarthy Chakwera directed the Ministry of Agriculture to begin the nationwide distribution of the inputs and ordered the exercise to be completed within 40 days.

But two days to the deadline, the ministry is far from reaching the crossing line, a development Kawale has attributed to the scarcity of forex and devaluation of the kwacha.

“Even though the exercise began well and was on course for completion within the set schedule, we have experienced two major disruptions that have derailed the process in the past two weeks, and we have since briefed His Excellency about both disruptions to get further guidance from him. The first major disruption was the inability of the central bank to make payments to suppliers due to the shortage of forex,” he said.

On devaluation, the minister disclosed that the loss in value of the kwacha has had a knock-on effect on pricing and the inflation of the budget the ministry had initially earmarked for the exercise.

But Kawale was quick to point out that President Chakwera has directed that they should consult with the Ministry of Finance to calculate how much time the Treasury would need to address the forex delays and avail supplementary funds to cover the shortfalls caused by the devaluation.

“He also directed that once we have guidance from the Treasury on these matters, we should recalculate how much time has been lost from the 40 day plan and extend the period of distribution beyond the 40 days as needed. After consulting the Treasury, our new target is to complete the exercise before Christmas.

“Thirdly, His Excellency directed that we give the nation an update of the state of fertilizer stocks in the country, the state of distribution so far and how we are addressing emerging challenges, an overview of what the distribution plan will look like in the next three weeks, and an outline of other programs in place to support Malawians beyond AIP,” he narrated.

Meanwhile, Kawale has disclosed that they have completed processing 125, 660 metric tons of fertilizers, representing 84 percent. He said the ministry first focused deliveries to hard-to-reach areas such as Usisya in Nkhata Bay, Nthalire and Misuku in Chitipa, Likoma, Makanjira in Mangochi, Lupachi in Nkhotakota and Khosolo in Mzimba.

He said a total of 29,929.58MT (598,591 bags) of fertilizers from suppliers within Meridian Group will start to be collected and distributed to retailing areas from 29^th November 2023.

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