The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says the first half of the 2016 fiscal year has been tough for business players on the back of continued devaluation of the kwacha.
At the close of the first half of the 2015/2016 fiscal year, the kwacha had depreciated by 5.9 percent to the dollar, according to figures released by asset management firms.
The kwacha depreciation is mainly attributed to low tobacco prices and high rejection rates that have negatively affected the inflow of foreign currency as well as the gain in value of the US dollar against other major currencies.
The loss in value of the kwacha is compared to a 6.31 percent appreciation recorded during the corresponding period in 2015.
MCCCI president, Karl Chokhotho, said business players are concerned with the continued depreciation of the kwacha.
“There was substantial slowdown in business growth in the first half but we remain optimistic that things will turn around in the second half. It is natural that in the first half of the year, there is lower consumption because most of the commodities are sold in the second half.
“Crops such as tobacco, cotton start moving around the months of June and July and this is the time when Malawians, mostly farmers, start having more money,” he said.
Meanwhile, the gross official reserves decreased marginally during the week ending July 15, 2016 compared to the previous week.
According to figures released by the Reserve Bank of Malawi, forex reserves stood at $606.63 million representing 2.90 months of imports as compared to $623.58, representing 2.98 months of imports, registered on July 8, 2016.
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