Fuel shortage fears as Zimbabwe offers to pay $23 million Malawi debt in fuel

Zimbabwe has proposed to pay its US$23 million debt to Malawi in fuel, a development that could bring back days of fuel shortages.

Malawian President Joyce Banda sent a delegation to Zimbabwe, which returned to the country on Thursday, with news that the country would receive fuel for a corresponding value.

"The Zimbabwe government has agreed to give us fuel and very soon they will dispatch trucks," Malawi Energy and Mining minister, Cassim Chilumpa told Malawi media. "We have accepted this arrangement because currently we are in need of the fuel."

The Malawian delegation, which came to the country last week, was expected to collect US$12 million, while the rest was expected to be settled later, but the fuel barter deal, means Zimbabwe might not have been able to raise the money.

The debt dates back to 2007 when Zimbabwe, in the throes of an economic and political meltdown, was failing to produce enough food to feed the nation.

Malawi is now also facing a cash crunch after western countries withdrew balance of payments support, with the country facing biting fuel shortages.

Zimbabwe is expected to provide fuel for next month. The late Malawian President Bingu wa Mutharika also came to Zimbabwe in February, seeking the money and also how to solve the fuel problems the country was facing and the barter deal seems to be the best for the two countries.