Malawi blames WB for forex shortages

November 26, 2009

, BLANTYRE, Nov 26 – Malawian President Bingu wa Mutharika has charged the World Bank and the IMF with causing foreign exchange shortages by forcing the country to liberalise the economy, state media said on Thursday.

"The International Monetary Fund (IMF) and World Bank have been forcing us to have a free market economy…but now all foreign business operators externalise forex to Asia and the Middle East," Mutharika said on public radio.

The two lending institutions are the major sponsors of Malawi\’s economic reforms.

"The forex is ours, but there is no money at the moment. Right now we cannot import anything. How do I run this country? The forex is externalised to Dubai, Bombay and London," said the economist turned politician.

He accused foreign investors of exploiting economy of the poor southern African and said they would be "deported and their companies closed."

Global household goods manufacturer Unilever and British American Tobacco are some of the top foreign companies operating in Malawi.

The foreign exchange woes are plaguing country regardless of the receipts of over 472 million dollars a year from tobacco exports, which makes up 70 percent of foreign earnings.

The crunch has led to fuel shortages, resulting in long queues of trucks and cars outside garages.

Reserve Bank governor Perks Ligoya told a media conference that the forex shortage had reached "crisis" levels, adding that the demand was "much higher than supply."

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