Malawi’s foreign currency woes may have less to do with shortages than with a deeper problem: the Kwacha’s limited role in international trade.
Leader for National Resolution for Change, Denis Mahata, claims that Malawians are not short of foreign currency.
Speaking during an interview on Tuesday, he said the problem is that the Malawi Kwacha is not in demand in other countries.
To solve this, he suggested a “supply chain” so that the Malawian currency can also be used in trade with other countries.
He pointed out that Malawi has minerals, but on the market these minerals are sold in other countries’ currencies.
He said this is a problem because, had it been the Kwacha was used, Malawi would have kept its own money and created a new currency on the global market.
He further explained that a country’s currency does not fall because it lacks strength. Rather, it happens because on the international market it meets currencies that have been given more strength than others.
He said people need to understand that the strength of a currency and its strength on the market are two different things, and that small countries like Malawi do not have the privilege of a strong currency on the market because of the calculations made by the Global Economic Forum.
Mahata said anyone who wants to fix Malawi must look at three areas if the country is to become a transformed economy.
The first is the currency, which has to be worked hard for because Malawi is a small country that runs on effort and cannot be run like America.
The second is the strength of the currency, which requires looking at the investment coming in and the size of the economy.
The third is the currency’s ability to attract foreign currency.
He also said successive governments spend their time covering up problems instead of fixing the existing structural problems, and suggested that the country should be dismantled and rebuilt properly from the start.