Malawi’s Tobacco Law set to improve returns for growers and the country’s revenue—Agriculture Minister Kawale

* To increase foreign exchange earnings; remove grower restrictions and curb exploitation

* It will also enhance sustainability of the tobacco industry and enhance compliance to local and global standards

Maravi Express

If assented to by President Lazarus Chakwera, the Tobacco Bill which the National Assembly recently passed will propel Malawi to have a robust legal framework for the tobacco industry that shall enhance tobacco production, its marketing as well as improve returns for growers and revenue to country.

This is an assurance from Minister of Agriculture, Sam Kawale which he posted on his Facebook page, saying once in operation, the law shall drive the country’s economy through increase of foreign exchange earnings; remove grower restrictions and curb exploitation.

It will also enhance sustainability of the tobacco industry and enhance compliance to local and global standards.

“Looking ahead, the 2024 tobacco marketing season projects a significant surge in earnings for these farmers, and at the heart of this financial upswing lies the devaluation of the Malawi kwacha,” said the Minister.

“In August, the exchange rate stood at MK1,094 to US$1. As the year progressed, the economic landscape experienced a notable shift in the form of devaluation, with the November exchange rate soaring to MK1,699 to US$1.

“This change has proven that it will be a catalyst for substantial increases in Kwacha earnings per hectare for the tobacco grower.

“Before the devaluation, the earnings for smallholder tobacco growers were calculated at MK4,512,000 per hectare based on a yield of 1,600kg and the prevailing average price of US$2.35/kg.

“Post-devaluation, with the November exchange rate, the same yield and price translate into a substantial increase, resulting in MK6,392,000 per hectare.”

Kawale further said the surge in Kwacha earnings will translate into increased purchasing power for smallholder tobacco growers in comparison to farmers growing other crops that are traded in Kwacha.

“Beyond individual gains, the enhanced earnings contribute to the overall economic stimulus within local communities. As smallholder farmers spend their increased income locally, the economic ripples extend to supporting local businesses, creating a cyclical boost to Malawi’s economy.

“In anticipation of the increased earnings in Kwacha, the tobacco registration and licensing for the 2024 season has already registered increases in tobacco volumes licensed by 31% a move from 188 million kilograms licensed in 2022 to 246 million kilograms licensed in 2023.”