Malawi’s worsening foreign exchange shortage is tightening its grip on the economy, leaving banks unable to supply businesses with the hard currency they need to import goods. The scarcity has pushed companies into delays, higher costs and shrinking stock levels as traders scramble for alternative, often expensive, channels to access forex.
Banks have sharply limited allocations, with many businesses receiving only a fraction of their requests. The squeeze has disrupted supply chains and forced importers to scale back orders, deepening shortages across retail and manufacturing.
The crisis has also spilled into the digital economy. Online transactions made with internationally enabled bank cards have become increasingly unreliable, frequently failing due to insufficient forex backing. Traders who rely on digital payments to restock from global suppliers say the situation is now unsustainable, driving them toward informal forex sources at significantly higher rates.
Malawi has battled continuous pressure on its reserves, driven by low export earnings, high import demand and repeated currency devaluations. Analysts warn that without fresh inflows, either from exports, multilateral support or investment, the strain on businesses will intensify, feeding into higher prices and further constraining economic activity.
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