Malawi’s President Lazarus Chakwera has directed police to heighten border controls to prevent tobacco smugglers from selling the produce to neighboring countries at better prices.
Tobacco is Malawi’s major export. Known as the “green gold”, figures from the country’s Agriculture Ministry reveals it brings in more than half of the country’s foreign exchange earnings.
Reports, however, indicate that about 10% of the crop is smuggled to neighboring countries like Zambia and Mozambique for better prices.
Some farmers told journalists that they make double their profits from selling outside compared to doing business in-country. They believe tobacco smuggling would only end if farmers receive competitive offers from buyers in Malawi.
Another major challenge is that farmers are forced to pay numerous levies and taxes that impact on their production costs. These include seed and auction taxes as well as associations fees.
While speaking at the launch of the annual tobacco marketing season, President Lazarus Chakwera said tobacco smugglers are influencing the prices of tobacco in Malawi, thus denying it foreign exchange.
“To those of you who are doing this, I will not spare you,” he said. “The Inspector General of Police who is already here, please tighten security in all areas where people are doing this illegal business. Such people should be arrested.”
Chakwera said his government recently entered into a deal with buyers that will provide favourable prices for farmers.
While a few farmers said they were happy with the prices offered for their produce at the start of the new season, others say it is just a façade and the prices will eventually drop as the season unravels.
Adam Chikapa, an economist based in Blantyre, said arresting tobacco smugglers will not stop the long-standing malpractice. To him, “the solution in this case, should be just creating conducive environment in terms of the sales that the farmers are making by giving them good prices”
Chikapa said it’s time Malawi reduce relying on tobacco for foreign exchange, citing dwindling demand following anti-smoking campaigns championed by the World Health Organisation and particularly the established corellation between tobacco use and cancer.
“We need now to embark on the production of other crops that are highly demanded outside there,” he said. “We have got industrial hemp, even legumes.”
However, lawmakers have recently passed a bill allowing cultivation of marijuana as an alternative to tobacco farming.
They believe marijuana, if grown commercially earn Malawi as much as $700 million per year, which is more than double of the foreign exchange it gets from the sale of tobacco.