Malawi's finance minister, Ken Lipenga, has said the country will continue to face erratic fuel supplies because of shortages of foreign currency and international suppliers' lack of faith in Malawi's economy.

The situation is raising concerns that fuel importers will once more not be able to open sufficient letters of credit (L/Cs) to keep Malawi supplied with enough fuel.

L/Cs suspended

International fuel suppliers refused supplies for a while during 2010 because Malawi failed to meet its payment obligations due to foreign exchange shortages.

This resulted in most fuel importers finding it impossible to open L/Cs in favour of international suppliers.

Currency shortages

Lipenga reckons the current fuel shortages are the result of a combination of foreign exchange shortages and a lack of confidence in Malawi amongst international suppliers.

The foreign exchange shortage can be largely put down to the weakening kwacha against major currencies, including the US dollar and the South African rand.

IMF reforms

The minister said in an interview that he does not see an end to this situation any time soon.

He is nevertheless optimistic that things will improve as the country progressively implements economic reforms backed by the International Monetary Fund and other donors.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.