June 6, 2011 / 9:36 AM / in 7 years

Malawi suspends timber exports because of graft

LILONGWE, June 6 (Reuters) - Malawi has suspended all timber exports for a month with immediate effect because of rampant corruption and smuggling, mainly to east Africa, the natural resources ministry said on Monday.

It also introduced a 100 percent timber export duty to curb illegal trade.

Besides east Africa, Malawian timber is sold to South Africa and Mozambique. A report last year showed that corruption and timber smuggling was costing the government $6 million a year in lost export revenue.

“We found out that a huge volume of timber, about 78 per cent, exported from Malawi to east Africa is unrecorded,” resources ministry official Ben Botolo said.

The crackdown is the latest sign of a squeeze on Malawian government finances caused by a freeze in donor funding and a declining tobacco sector, which has historically accounted for 70 percent of foreign currency earnings.

In his budget speech last week, finance minister Ken Kandodo said the 2011 tobacco season might be “one of the worst in our history”, with earnings in the first four months down 80 percent on the same period a year ago. (Reporting by Mabvuto Banda, Editing by Ed Cropley)

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