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Wednesday 29 September 2021
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Modern day barter as Zimbabwe gives Malawi fuel in maize loan repayment

Zimbabwe has given Malawi 2 million litres of fuel as part of settlement for a US$24m loan Harare owes Lilongwe in a maize deal.

Robert Mdeza, Chief Executive Officer for the National Oil Company of Malawi, said on Saturday that the 2 million litres comprised diesel only.

“Already 17 tankers are in the country and the rest will come in by mid-next week,” he said.

The administration of the late Bingu wa Mutharika loaned Zimbabwe the maize in 2007 but since Mutharika and Robert Mugabe were close friends the repayment of the loan was not pushed.

But when the 78-year-old economist-turned-politician died suddenly following cardiac arrest in April this year his successor, Joyce Banda, dispatched Energy Minister Cassim Chilumpha to Harare to remind Zimbabwe of the loan.

Since Malawi is reeling from an acute shortage of fuel due to a foreign exchange crunch a deal was struck for Zimbabwe to repay the loan in the form of fuel.

Mdeza said with the coming of the 2 million litres of diesel there will still be between 10 and 15 million litres of fuel more for Zimbabwe to conclude the loan.

“We can’t know for sure what is remaining because prices of fuel change every day,” he said.

Malawi consumes about 700,000 litres of fuel everyday meaning that the 2 million litres from Zimbabwe may last up to three days.

During the twilight of the Mutharika administration Malawi suffered an acute shortage of fuel because most Western donor nations either suspended or reduced aid to the southern African country in protest of deteriorating political and economic situation.

Soon after President Banda assumed office the situation slightly improved as some donors like Great Britain, Norway, the World Bank and the International Monetary Fund (IMF) resumed aid. But the foreign exchange situation is yet to normalise as not all the donors have fulfilled their pledges to Malawi.


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