Forex Shortages Stall Key Water Projects, Threatening Economic Growth
Key Business Points
- Foreign exchange supply challenges are hindering the progress of the Lilongwe-Salima Water Project, a crucial infrastructure development for Malawi’s business community and residents.
- The project’s finance director, Pride Phiri, has engaged the government to prioritize the project’s foreign exchange allocation to ensure timely completion, which is now projected for the first quarter of 2027.
- To mitigate foreign exchange challenges, the Reserve Bank of Malawi is emphasizing the need to increase exports to facilitate easier financing of projects, a strategy that local entrepreneurs and businesses can explore to stay competitive.
The Lilongwe-Salima Water Project, a $315 million infrastructure development, is facing significant challenges due to foreign exchange supply shortages. According to Khato Civils group finance director Pride Phiri, the project’s progress is being hindered by the inability to import necessary equipment, which is essential for meeting the project’s timelines. Phiri emphasized that the project has already surpassed the 40 percent threshold, but foreign exchange challenges are affecting the speed and timelines of the project. The company has engaged the government to prioritize the project’s foreign exchange allocation to ensure timely completion.
Minister of Agriculture, Irrigation and Water Development Roza Mbilizi acknowledged the foreign exchange challenges and reiterated the government’s commitment to completing the project, which will provide potable water to residents. Mbilizi emphasized that "water is life", highlighting the project’s significance to the community. The project’s completion is crucial for the local economy, as it will create jobs and stimulate economic growth.
The Reserve Bank of Malawi spokesperson Boston Maliketi Banda noted that foreign exchange challenges will affect some projects in the country, emphasizing the need for collective efforts to address the issue. Banda suggested that increasing exports can help facilitate easier financing of projects, a strategy that local entrepreneurs and businesses can explore to stay competitive. As the project progresses, it is essential for businesses to stay informed about the foreign exchange market and explore opportunities to mitigate risks.
In Chichewa, the local language, this concept is known as "kugundika ma enterprise", which means "to manage or mitigate risks in business". By understanding the foreign exchange challenges and export opportunities, businesses can make informed decisions to grow their enterprises. The Lilongwe-Salima Water Project is a significant investment in Malawi’s infrastructure, and its completion will have a positive impact on the local economy. As the project moves forward, businesses can capitalize on opportunities arising from the project, such as supplying goods and services to the project contractors. With the right strategies and support, Malawi’s business community can thrive and contribute to the country’s economic growth.
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