By Burnett Munthali
President Dr. Lazarus Chakwera has revealed that he has accepted an invitation from the President of the United Arab Emirates (UAE) to visit Abu Dhabi for discussions aimed at addressing Malawi’s fuel challenges and other long-term needs. He emphasized that the trip, scheduled for next week, will be fully funded by the UAE government.
The announcement came during a Special Address to the Nation delivered from Kamuzu Palace in Lilongwe on Wednesday evening.
In his speech, President Chakwera acknowledged the fuel supply disruptions currently facing Malawi, which he attributed to a shortage of foreign exchange. He disclosed that Malawi’s monthly fuel demand stands at approximately $50 million, but the National Oil Company of Malawi (NOCMA) and Petroleum Importers Limited (PIL) have struggled to raise sufficient forex to meet the demand.
As of October 2024, NOCMA had accumulated $72 million in debt to fuel suppliers, leading to a temporary suspension of imports. “In the month of August, NOCMA only raised $23 million of the required forex, while in September and October, that number fell below $20 million,” Chakwera said. The resulting 10-day suspension of fuel imports caused the fuel queues that have plagued the country for the past six weeks.
To address the crisis, Chakwera outlined several measures his administration has undertaken:
Engaging Development Partners: The Treasury secured a $50 million revolving credit facility from the Arab Bank for Economic Development in Africa (BADEA).
Forex Mobilization: The Reserve Bank of Malawi has been tasked with accelerating efforts to secure more foreign exchange through commercial banks.
Transition in Procurement Systems: The government is moving away from the Open Tender System to a Government-to-Government arrangement for fuel procurement, which is expected to improve payment terms and ensure a steady supply.
“These measures have allowed NOCMA and PIL to provide fuel at filling stations, and tonight I must thank you for your patience during the six weeks we have been having meetings in the night to resolve the fuel shortage,” Chakwera said.
The President emphasized the need for an alternative approach to fuel imports, as the Open Tender System has proven unreliable, contributing to recurring fuel crises over the past two decades. The Government-to-Government arrangement aims to provide more secure access to fuel while addressing the financial constraints of local importers.
President Chakwera’s visit to Abu Dhabi is expected to strengthen ties with the UAE and explore opportunities for securing long-term solutions to Malawi’s fuel supply challenges. He reiterated his administration’s commitment to mitigating the impact of the fuel crisis on citizens and businesses.
“The ongoing forex shortage has forced many of you to suffer long days and nights at fuel stations, as well as disruptions to your lives, work, and businesses,” Chakwera said. “This visit marks a step forward in ensuring a more stable and resilient fuel supply for Malawi.”
As Malawians await the outcomes of this high-level engagement, the President’s initiatives signal a proactive approach to resolving one of the country’s pressing economic challenges.
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