Malawi sells gold, seeks $120 million Afreximbank loan to ease fuel crisis

Malawi is seeking a $120 million Afreximbank loan while monetising gold reserves to stabilize fuel imports, as foreign exchange shortages strain one of Southern Africa’s most import-dependent economies.

The government confirmed it has already liquidated portions of gold held by the Reserve Bank of Malawi, generating about $30 million used to unlock fuel payments at international ports. The move underscores the severity of liquidity stress confronting the country’s external accounts.

Information Minister Shadric Namalomba said the proposed Afreximbank facility is expected to provide immediate relief to clear outstanding fuel shipments, with disbursement anticipated within a week.

Forex pressure tightens fuel import chain

Malawi’s fuel import model has increasingly shifted toward upfront cash settlements, a requirement that has amplified supply bottlenecks amid scarce hard currency reserves.

Global oil volatility and broader geopolitical tensions have further compounded the pressure on Malawi’s balance of payments, limiting its ability to smooth import costs and maintain consistent fuel supply.

Importers say access to foreign currency remains the single biggest constraint in securing shipments, leaving the country exposed to periodic shortages and price distortions.

Fuel shortages return as economic flashpoint

Fuel scarcity has re-emerged as a politically sensitive issue in Malawi, with long queues at petrol stations once again becoming visible in urban centers.

While conditions had temporarily improved following earlier stabilization efforts, recent external shocks have reversed those gains, bringing renewed public frustration over energy availability and pricing stability.

The issue previously featured prominently in national elections, highlighting how fuel supply disruptions have become closely tied to perceptions of economic governance.

Structural weakness in import-dependent economy

At the core of Malawi’s recurring fuel challenges is a structural shortage of foreign exchange buffers. The economy remains heavily dependent on imports, leaving it vulnerable to global price swings and external financing conditions.

By turning to asset-backed liquidity, such as gold sales, and emergency credit lines like the Afreximbank facility, policymakers are signaling both urgency and constraint in managing near-term economic stability.

Without sustained improvements in export earnings or reserve accumulation, analysts suggest the cycle of fuel stress and currency pressure may persist, even as short-term interventions provide temporary relief.