Economist Henry Kamkwamba has described a new Reserve Bank of Malawi measure limiting the amount of foreign currency people may physically possess as a sign of desperation in the management of the country’s foreign exchange crisis.
Under the Foreign Exchange (Limit on Physical Possession of Foreign Currency) Notice, 2026, the central bank prohibits people from possessing more than $1,000, or its equivalent in another foreign currency, without permission.
The RBM issued the notice Sept. 7 and published it in the Malawi Government Gazette on Sept. 18.
People taking or sending more than $1,000 in foreign currency outside Malawi must provide documentary evidence that they bought the money from an authorized dealer or obtain permission from the RBM.
The notice also limits the amount of Malawi kwacha that people may take or send outside the country without permission to the equivalent of $5,000 for cross-border traders and $100 for other travelers. Kamkwamba said the measure “screams desperation.”
“$1,000 is pocket change. I feel that they’re missing the forest for the trees. The problem is not the small quantities. It’s the big deals that slip through unaccounted for, holding our usual problems at their ceteris paribus levels — lack of exports, a large import bill, collectively huge trade deficits and current-account deficits, including debt servicing,” he said.
“I don’t think your $1,000 will solve our forex crisis. Aggressive import substitution would,” he added.
The measures come as Malawi faces persistent foreign currency shortages and widening external imbalances. The RBM has acknowledged difficulties allocating foreign exchange to essential sectors because of inadequate reserves.
National Statistical Office data show that Malawi’s trade deficit widened 15% in 2025 to $2.67 billion, from $2.2 billion in 2024. Imports rose to $3.6 billion, while exports fell to $936.3 million.
The World Bank has described Malawi’s external imbalances as acute, saying imports are more than triple exports amid a weak and undiversified export base, rising import demand and critically low reserves.
Kamkwamba said the government should focus on increasing exports and pursuing aggressive import substitution instead of targeting small amounts of foreign currency held by individuals.
