Thursday, 19 April 2012

Could regional trade solve Malawi's fuel crisis?

It is being reported that Petroholland Oil Refining may present an opportunity for Malawi to - finally - see the end of a long-standing fuel crisis. It appears that Petroholland may be willing to accept Malawian Kwacha in payment for the fuel. This local currency would then be used to buy food products to export to Namibia.

A shortage of forex is one of the key reasons Malawi has been running short of fuel. There are, of course, many reasons for the forex shortage - ranging from poor tobacco prices to the former presidents battle of wills with international donors. The impact has been felt across the country, particularly by the poorer citizens, as fuel, food and medication shortages dragged on. A fuel supply not dependent on foreign currency may just be the answer.

US Dollar trade is fairly standard in Southern Africa but many countries routinely face forex shortages. Greater regional trade, using local currencies, could help. 

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