As tobacco declines, Malawi must switch to cannabis - president

·2 min read
Malawi's President Lazarus Chakwera is sworn in in Lilongwe, Malawi

By Frank Phiri

BLANTYRE (Reuters) -Malawi President Lazarus Chakwera warned on Wednesday that his country's leading foreign exchange earner, tobacco, was in terminal decline and he urged a switch to high-growth crops like cannabis, which was legalised locally for some uses last year.

Chakwera made the comments during a state of the nation address in which he said tobacco was expected to earn less than $200 million in 2021, a figure roughly similar to the past two years but well below previous annual earnings that used to top $350 million.

On Wednesday, neighbouring Zimbabwe's government also changed its regulations to encourage investment into cannabis.

"The inconvenient truth ... is that while Malawi has come a long way by relying on tobacco as our ... largest single crop contributor to our GDP, this reliance is now seriously threatened by declining demand worldwide," Chakwera said.

"Clearly we need to diversify and grow other crops like cannabis, which was legalized last year for industrial and medicinal use," he added.

Tobacco was a stain on an otherwise booming agricultural sector, which the president said would enable economic growth to recover to 3.8% this year, according to the latest forecasts, and would push it to 5.4% next year.

That compared with last year's lacklustre 1.9% growth owing to the fallout from the COVID-19 pandemic.

Decades of public health education have gradually convinced people worldwide of the dangers of tobacco, leading to a sustained drop in sales. At the same time, cannabis has started to be accepted as a medicine.

Malawi's parliament passed a bill in February last year that makes it legal to cultivate and process cannabis for medicines and hemp fibre used in industry, but stops short of decriminalising recreational use.

Chakwera said the agriculture ministry would "search for a basket of alternative crops so that by 2030, Malawi can do away with its reliance on tobacco."

Countries around the world are either legalising or relaxing laws on cannabis, including several in southern Africa such as Zambia, Lesotho and Zimbabwe.

Zimbabwe's new rules will allow investors to wholly own cannabis businesses, a departure from previous requirements to partner with the government. They also allow cannabis to be produced anywhere in Zimbabwe, instead of in restricted locations. Investors can keep export earnings in U.S. dollars for up to four years, a government statement said.

(Additional reporting by MacDonald Dzirutwe in HarareWriting by Tim CocksEditing by Catherine Evans and Giles Elgood)