Malawi’s Energy minister Cassim Chilumpha has said his country expects near neighbours Zimbabwe to repay the $23 million loan balance by November this year.
The balance of $23m is part of $100 million soft loan extended to Zimbabwe in 2007 by the late Bingu Wa Mutharika’s government for buying maize to help deal with critical food shortages in the country.
In May this year following discussions, the two countries agreed that Zimbabwe would supply fuel to Malawi to offset the debt balance. Chilumpha says his country now expects the debt to be completely recovered through fuel supplies by November this year.
Chilumpha told The Business Times in an interview that Zimbabwe has so far repaid $5 million worth of fuel to the country.
“As government, our priority was to secure fuel for the country hence we made the arrangement with Zimbabwe to repay the $23 million loan balance through fuel,” said Chilumpha.
Zimbabwe has been supplying fuel to Malawi from the same month of May. “We are still offloading consignments,” said Chilumpha. He said government expects the complete amount of supplies to be delivered to the country by November. Chilumpha said the challenge, however, was that the whole exercise required a lot of vehicles for transportation.
He said for the $5 million worth of fuel already supplied, 40 tankers had to be sourced to transport the fuel. Chilumpha also said that with the current oil prices on the international market, Malawi was an advantage in the deal.
“As prices go down on the international market, we will be benefiting from the deal as we will get more fuel. This means reduced local pump prices. However, if the international prices go up before the repayment is done, then we will be disadvantaged,” he said.
