The Government of Malawi has introduced a new policy requiring foreign tourists to pay for hotel accommodation exclusively in hard currencies such as U.S. dollars and euros.

The measure, announced on Friday by Finance Minister Joseph Mwanamvekha during a mid-year budget review, is aimed at stabilizing the country’s critically low foreign-exchange reserves.

Mwanamvekha explained that the decision follows the termination of the IMF’s Extended Credit Facility earlier this year and the suspension of donor budget support, both of which have worsened Malawi’s foreign-exchange position. He emphasized that the steps will “save every dollar and close loopholes” that have reduced reserves to less than one month of import cover.

Key measures outlined include:

• Hotels and lodges must obtain special licences from the Reserve Bank of Malawi to accept and retain foreign currency directly.
• Exporters are now required to repatriate earnings within 90 days (down from 120) and surrender excess forex after import payments.
• Short-term foreign-exchange derivatives are banned until stricter regulations are introduced.

Tourism, Malawi’s second-largest forex earner after tobacco, contributed $49 million in 2024. However, industry stakeholders have warned that mandating hard-currency payments could discourage budget-conscious travelers and redirect bookings to neighboring countries such as Zambia and Tanzania, which permit local-currency settlements.

The kwacha has lost more than 40% of its value against the U.S. dollar since the last devaluation in 2023, underscoring the urgency of measures to protect reserves and stabilize the economy.