Karonga small-scale business owners urge lasting solutions to forex crisis

By Winkly Mwaulambo

Small-scale business owners in Karonga are calling on the government to implement long-term solutions to the country’s foreign currency shortage instead of solely cracking down on black market currency trading.

Speaking to Capital FM, Emyliah Mwausegha, owner of Nausegha Collection Centre, highlighted the difficulties small businesses face in accessing foreign currency through formal banking channels due to stringent requirements.

“I started my business in 2023, but as a small-scale entrepreneur, obtaining forex from banks is nearly impossible because they require documents like passports. For businesses like mine, securing a business license is already costly. Instead of focusing primarily on shutting down black market forex dealers, who sometimes provide the only viable option, the Reserve Bank of Malawi (RBM) should prioritize lasting solutions,” she said.

Mwausegha suggested that the government should ensure banks have a sufficient supply of foreign currency and introduce legal forex dealers or agents to facilitate easier access for small businesses in Karonga.

She believes this approach would create a balanced system that benefits both buyers and sellers.

Echoing her concerns, economic expert Abel Mwenibanda emphasized the need for a multi-stakeholder approach to improve forex availability.

“For businesses to thrive, stakeholders and government ministries must collaborate rather than work in isolation. Policies governing business licenses should not be overly restrictive, as this discourages entrepreneurs from operating in a legal yet accessible environment,” Mwenibanda stated.

He also warned that increasing forex reserves in banks without expanding access would not provide a sustainable solution.

“Flooding banks with foreign currency while restricting access to a select few will only worsen the situation, ultimately suffocating many businesses,” he cautioned.

Recently, the Reserve Bank of Malawi announced a crackdown on black market forex trading as part of efforts to address the country’s forex shortages.

However, business owners argue that without long-term structural reforms, such measures may do little to resolve the crisis.