Page 14 - AfrElec Week 03 2023

AfrElec POLICY AfrElec

Forex shortage

hampering Malawi’s rural

electrification drive

MALAWI THE Reserve Bank of Malawi (RBM) has failed the problem of forex is emanating from us? Did
to provide foreign currency to local banks to they want us to source forex on the black market?
support companies undertaking the country’s They know that is illegal.”
rural electrification project. The source added that in one instance, a local
According to a local daily, Nyasa Times, commercial bank was supposed to remit about
President Lazarus Chakwera’s government is $16mn to a foreign manufacturer on behalf of
prioritising spending on the importation of local suppliers but only raised $160,000.
fuel, fertilizer and medical supplies instead of MAREP is designed to boost energy access
the Malawi Rural Electrification Programme to peri-urban and rural areas in a country
(MAREP). whose access rate, according to the United
A representative of one of the contractors States Agency for International Development
alleged on condition of anonymity that Alfonso (USAID), is 15%. Only 5% of households in rural
Chikuni, the principal secretary for the ministry Malawi where more than 80% of the population
of energy, is, in fact, considering cancelling the resides, is connected to the grid, while 62% of the
MAREP contracts by January 25 and setting up urban population has a power connection.
a new procurement committee in order to start Meanwhile, a long-running lack of foreign
the bidding process afresh. currency has resulted in widespread fuel short-
In a letter dated September 12, 2022, to one of ages and medical drug stock-outs in public
the suppliers, Chikuni acknowledged the hard health institutions.
currency crisis and its impact on MAREP. He Another supplier, writes the Nyasa Times,
told the contractor that the programme is not a wondered if the purported plan to cancel the
central bank priority, but RBM will “endeavour” running contracts would resolve the foreign cur-
to provide the funding. rency shortage in the donor-dependent south-
The reported decision by the government to central African nation.
scrap the MAREP contracts, Nyasa Times high- Malawi in November became the first low-in-
lighted on January 14, could, however, attract a come nation to receive financing from the Inter-
legal challenge. national Monetary Fund (IMF) under a new tool
“We are ready to sue the government,” said intended to help countries cope with global food
the unnamed contractor. price shocks.™
Why would they cancel the contracts as if

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