Zim starts repaying Malawi debt with fuel

The government of Zimbabwe has supplied Malawi with fuel worth $10million, commencing a repayment of its $23 million maize debt.

Energy minister Cassim Chilumpha said the Zimbabwe fuel is partly responsible for the current improvement of fuel supplies in the country.

Said Chilumpha: “The Zimbabwe has made arrangements to pay for the purchase of $10 million worthy of fuel and as of now about half of that fuel has already arrived in the country.

“We are waiting to start the process for the remaining $5 million after that we will make special arrangements for the delivery of fuel worth of the remaining $13 million.”

The Bingu wa Mutharika administration gave Zimbabwe a soft loan of $100 million in 2007 for buying maize to help deal with critical food shortages worsened by economic sanctions imposed by Western donors.

Zimbabwe repaid $76 million of the loan but failed repay the balance apparently because the of close relationship between Malawi’s late President Bingu wa Mutharika and President Robert Mugabe.

But new Malawi leader, Joyce Banda has been pressing for payment of the balance as her country battles an economic crisis which donors have warned could yet get worse.

Chilumpha justified the decision to have the money translated into fuel, citing the erratic supplies in the country.

“The government of Zimbabwe has agreed to give us fuel and very soon they will dispatch trucks. We have accepted this arrangement because currently, we are in need of the fuel,” Chilumpha said earlier.

Officials said fuel worth $23 million is just short of reaching Malawi’s monthly national requirement of $30 million.

Malawi has been plagued by fuel and foreign exchange shortages for almost two years – problems that helped spark anti-government protests last July in which at least 18 people were killed.

The economic situation was worsened by tensions with key international donors and institutions that had been important sources of foreign exchange.

Several key donors – including former colonial power Britain – suspended aid to the country, citing concerns about growing authoritarian tendencies in Mutharika’s government.

But after Mutharika’s sudden death last month, President Banda has moved swiftly to restore relations with international lenders and donors.