What the Tobacco Marketing Season Means to the Forex Situation in Malawi

The Tobacco Control Commission (TCC) in conjunction with the Malawi government's Ministry of Trade and Industry announced this week that the local tobacco market will officially open on the 9th April 2025 in Lilongwe, on the Lilongwe Auction Holdings floors.

Tobacco has remained the country's main source of forex generation since Malawi was granted independence in 1964. The opening of the 2025 tobacco marketing and selling season gives some hope of an increase in much sought-after forex immediately, and subsequently for a period of time it will ease the pressure brought about by the ongoing forex shortages in the country.

This is far from being a permanent solution, given that demand for tobacco on the global market continues to decline and that Malawi remains stubbornly dependent on agriculture to generate the bulk of its forex. Currently only one third of the country's forex supply is export generated, with the balance coming in the form of donor support and in the ever-extending IMF credit facility.

The major imported commodities that consume most of Malawi's forex are fuel, farming inputs such as fertiliser and medical supplies. These are critical commodities that the country and its citizens simply cannot do without. Malawi hasn’t invested anywhere near enough in broadening its foreign currency earning activities and is falling behind its neighbours as far as industrialisation is concerned. Other sectors such as tourism and mining are developing, but at a pace that will not help resolve short-term forex shortages. 

Some of the notable institutions that will continue to benefit from the tobacco marketing and selling season are the National Oil Company of Malawi (NOCMA), Petroleum Importers Limited (PIL), and the medical suppliers of drugs and medical equipment normally procured by the Central Medical Stores Trust in conjunction with the Ministry of Health. But if forex shortages are to be overcome in the future, Malawi must find other ways of broadening its export basket.