Business and Finance

CISANET fears kwacha depreciation will affect food production

Civil Society Agricultural Network (CisaNet) has expressed fear that the recent depreciation of the Malawi Kwacha against the US dollar will negatively affect the country’s food production due to its overreliance on imported fertilizers.

CisaNet is a leading civil society network working on food and agriculture issues in Malawi. The network, in a statement released on Wednesday, says the recent socio-economic development changes that have the potency of further weakening the country’s already frail food systems.

Chagona: We all need to take action to avert food crisis
Chagona: We all need to take action to avert food crisis

CisaNet Board Chairperson Herbert Chagona warned that should decisive actions not be taken as a matter of urgency, the said developments –as things stand— are poised to condemn Malawi to probably the worst food crisis in decades.

“A case in point is the need for the government to expedite the process of purchasing farm inputs to ensure farmers –both smallholder and commercial— do get access to the same on time.  We also hope the government, through The Treasury, has reserved enough forex to help cushion the changes,” reads the statement in part.

Recently, the Reserve Bank of Malawi announced a 0.27 percent depreciation of the Kwacha as of Thursday, 31 August 2023. This comes against another depreciation in June when the Kwacha depreciated by 2.4 per cent against the US Dollar to trade at K1,058.82.

The announcement on the Malawi Kwacha’s continuous losing grip against other major trading currencies, came barely two days after the latest [June 2023-March 2024] Integrated Food Security Phase Classification (IPC) Acute Food Insecurity Analysis pitied 4.4 million people as facing high acute food insecurity in the country.

The figure this year is almost one fifth, or 22 per cent of the country’s total population. The vulnerable populations have increased by a whopping 1.4 million people when compared to that as quoted in the 2023 IPC Report. The same report also projects that the country’s food situation will worsen between October 2023 to March 2024.

A week prior to the release of the analyses, another report –Global Information on Early Warning Systems— by the Food and Agriculture Organisation (FAO) indicated that Malawi is among countries that will experience extreme heat weather conditions from November 2024 to March 2024.

According to Chagona, the above developments or revelations cast a dark shadow for Malawi’s food security.

“With the onset of the growing season, the weakened Kwacha and the current forex shortage continue to threaten the country’s other key three Fs on the country’s economic growth; namely food, fuel and fertilizer. The three, coupled with the country’s reported dwindling import cover in forex reserves, go hand-inhand signaling the beginning of yet another cycle of hunger,” reads the statement.

“For instance, scarcity of forex and intermittent fuel supplies may lead to the government not being able to import fertilizers for its Affordable Inputs Programme (AIP) whose beneficiaries form almost half of those facing acute foot shortages in the latest IPC analysis. Also, commercial farmers and other households who are not part of AIP beneficiaries will not access the fertilizers in time; let alone access any at all.”

CisaNet urged the government and all stakeholders to work together to protect vulnerable populations, secure food availability and access, and build resilience against climate-related challenges.

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