Tantalising ourselves: Muckraking on Malawi loan to cushion Kwacha

So we got a very expensive loan from the African Development Bank (AfDB), without even having the courtesy of bouncing it with Parliament, to cushion our kwacha?

Kwacha

Kwacha

Goodall Gondwe, our purse keeper, was right on the ball when he said we used ‘tricks’ to arrest our wayward kwacha from tumbling south and created a false impression that the kwacha was on the mend.

But can an economy survive on these kindergarten ‘tricks’? The Big Kahuna tried it by using his trusty boys – the Mwanamvekhas of this world – to ‘trick’ us into borrowing heavily from commercial banks to create a mirage that the ‘zero-deficit’ budget was working. Will the ‘zero-aid’ budget work by using the same ‘tricks’, albeit this time around Peter, Bingu’s younger brother and protégé, borrowing internationally and expensively?

A dear friend dropped this witty analogy of the Malawi of today that, I think, captures truthfully what we truly are. Enjoy:

“Times are tough; everybody is in debt, everyone is living on credit. A tourist, let us call him Mr. Jones, drives through town, stops at a motel and lays K10,000 on the desk, saying he wants to inspect the rooms upstairs.

“As soon as the tourist goes upstairs, the motel owner grabs the money and runs next door to pay his debt to the butcher. The butcher takes the K10,000 and runs down the street to settle his debt at the piggery he got his week’s supply from.

“The piggery owner takes the K10,000 and heads off to settle his bill with his feed supplier who quickly runs to the local prostitute, who has also been facing hard times and has been offering her “services” on credit.

“And the hooker rushes to the motel and pays off her room bill.

“Meanwhile, the tourist, Mr. Jones, comes back down the stairs stating that the rooms are not to his taste. He claims back his K10,000 and leaves.

“No one, in this cycle, has produced anything and no one has earned anything! But the whole town now thinks that they are somehow out of debt!”

That, sadly, is how Malawi has been reduced to now…borrowing from Peter to pay Paul and good ol’ Goodall tantalises us that we have ‘tricked’ the economy back into working again?

My foot!

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40 thoughts on “Tantalising ourselves: Muckraking on Malawi loan to cushion Kwacha”

  1. Proff. Ngangabulawayo says:

    That way Malawi will never ever prosper. A quick change of mindset is inevitable to put our economy in good order. To rely on borrowing and/or credit will eventually lead to property grabbing if not settled in time. Thus, assuming the tourist, Mr. Jones, did not come with 10 pin. We are now dwelling in the challenging situations. Even businesses are being operated on credit basis,,,,, what do we gain? nothing,,, lol,,, poor nation. Let change everything. Yes, from national leadership down to our villages.

  2. Balamanthu says:

    The problem in Malawi is that when people like Ralph bring out serious issues like the one above, people tend to joke about them because we are naturally jokers.Not serious at all and very dishonset.Those that understand Public Financial Management Management and basic tenets of development will understand that what government did is aweful and unproductive.

    Mukhala choncho utsiru wosalekeza and not being serious with life.How can a country of dishonest people who thrive on football and zibwenzi develop.Kenako anzanu akalemba mfundo you stupidly criticize without any brain.

    We have very few people in country who think- thats why we dont develop.Just look at the comments herein.

  3. zex says:

    It’s not surprising in anyway that we borrowed or swapped for we have always had this craving for loans: a mighty appetite so to speak. You people in the know how, answer Ralph and inform us as to whether this deal is constitutionally correct, we know it’s politically right for DPP. Did we have to override the role of parliament in such a transaction?

  4. Gimbogo says:

    DPP

  5. Munyalika says:

    amayi ali pheee ku states

  6. Bwitoto says:

    Koma akulu akale sananame ponena uti “UKAYENDA NDI MNGULU WAYENDA WEKHA”

  7. make says:

    Koma ka nkhani ka tourist who comes with a 100 dollar bill to a broke town/village is so cliche bwanji. Simunakapeza kena kanukanu ka original?

  8. Big brain says:

    Buluzi tenthani how many orphans are u assisting or what manufacturing bussiness are u doing nothing blaming blaming blaming stupid stupid as I speak am mixing manure to start making home made fertilizer and I will expand and expand and the government will stop importing fertilizer and Ed will save the dollar ki ki ki u must also follow suit and start doing something

  9. Patriot says:

    Paja nthawi ijayi anakatenga ngongole ku ma banki kufuna kupitsitsa a malawi kuti mra ikuchita bwino.
    Sindikudabwayi, ndi chikhalidwe ku chipani cha chimanga chopelewera (et angadyetse dziko lonse ndi chimanga folo basi?)

  10. James says:

    The story of the month, omva pang’ono ayesa raph wawanyozela chipani ndi azigogo…omva mwa “mmalawi okonda ziko’ wazindikila kuti its about our nation and future. Keep it up, ur stories are 4 the above average.

  11. Economist says:

    -ADB bank loan interest is cheap
    -if govt borrows from local banks the demand on kwachas goes up,businessmen can now not borrow cheap funds from local banks
    However if the loan is used into the economy wisely then it is a blessing but if it goes in corrupt pockets then it is a curse

  12. Mwama Du says:

    Politicians can not be trusted. They are liars. I hate this government.

  13. geo stream says:

    I am not surprised that it is only the amateurs like sundu and tenthani who this is strange. Why is it that no reputable economist has condemned this. I am sure that those who wanted this govt to collapse have been dealt a big blow. They could have loved if we borrowed from their masters IMF and not PTA bank. Sadly most Malawian s can’t comprehend debt selling. Ignorance.

  14. Chikopa says:

    Atola nkhani ena mmwangokhala akulu koma osazindikila iwe sukuziwa kuti pakangala forex production ikamachitika imabwelesa forex ya mbiri ndipo ngongoleyo singavute kubweza ? Ma company akuluakulu akunja aja amakabweleka ndalama ku bank , udikile 3 years ngati malawi singala ndi forex yokwana 2billion us dollars ,ine poyamba ndimaona ngati Tenthani ndiozindikila koma eeee bulutu weniweni kapena kuti gologolo

  15. Wa ku Lilongwe says:

    Komatu mwina nkhani za chumazi tidzifunsa anthu aukachenjedwe wa za chuma azitithandiza kulemba kuti tisakweze anthu imphyo, nkhani za zii. Kwacha kulimbakoku, ikuthandizidwa ndi ngongoleyi. Ngongole za PTA, kaya mukutinso AFDB zimakhala zofewerapo, simungafananize ndi mabwerekedwe a kumakomesho banki m’mbuyomu. Izi zithandiza kuti a ma bizinesi athe kuchite phindu kamba ka kusagwedezeka kwa Kwacha. Akachita phindu, atha kumachitano export kuti atiwinile Forex INA, kupitiriza kuthandizira Kwacha. Si ngongole zonse zili zoyipa.

  16. Chamwaka says:

    “…….the whole town ….somehow think they are out of debt.”

    Well, they actually are, you fool, that K10,000 was a short term loan -to the hotel owener-paid back without interest.

  17. chakwanuleka says:

    This article has all the facts to warn sensible Malawians especially our legislators to be on guard and protect our country from plunging into heavy debts. Those who are against it are doing so possibly because the whole subject is beyond their comprehension

  18. Those who are busy support government borrowings they really don’t know how that will greatly affect the country’s economy. some of the loans collateral are tobacco earnings, now government put some new systems in order give a proper report to its lender. refuse to be dependant country on donors and accept to be slave of loans. selling Government debt to pay salaries now sale MSB the next is lake Malawi to Canada oil company. we are watching you

  19. aphiri says:

    The issue here is we goofed. We swap kwacha with dollars at a rate of 510 /$ :it means $4m was mk20bn .now because AfDB has got these kwachas here they will get back their kwachas when the rate is 400/$ .they will hv $5m . That means its around 25% interest which is too much from the back which its interest rate is always low when borrowing in normal circumstances

  20. the poorest country on earth says:

    guys, monga ka example kameneka sikanakusangalatseni ayi? mulidi moyo?

    akutanthauza kuti, ndalama zobwerekazi sizipundula. aliyense apa walipila nzake koma aliyense wapezeka alibe chilichonse, choncho palibe wadzitukula moyo wake. nice one ralph! keep ’em coming

    1. JB says:

      Its a very old story, 1990.

      And you are hearing it today?

  21. To a certain extent this helped the country economy but what happens next is what matters

  22. Chembe says:

    A lot of readers bash mr Ralph for his analysis of political outings going on in this country. First of all the stories that he tackles are not breaking news but stuff that citizenry heard at the start of the week and never paid much needed nitty gritty attention. In modern world that’s how people get their news with humorous flavor. Keep it up mr Ralph

  23. Federal says:

    For us to survive now we need people with economic mathematical tricks like the Gudols. For the kwacha to appreciate its not a joke, it really requires brains to play some tricks be it loans or not osati zolemba za mbuli ya mtolankhani
    yotchedwa Rafaele

  24. NYAKWAWA says:

    impeccable,eye catching and hunky dory piece of writing!

    Keep it up Mr Tenthani.
    Let sleeping dogs lie.

  25. here we go again says:

    whether you like it or not u are going to pay back this ngongole not the president or goodall but we the ordinally malawians. Shame to this idiot call himself a president

  26. Kafire says:

    Kodi inu a Raphael mwakhuta ma sachet eti. What are you telling us? In order to protect the Kwacha we had to borrow internationally. So you wanted us to borrow the already saturated kwacha? Very childish thinking. The responsibility to exports more and earn the dollar is not government’s. The responsibility rests on you and me. You have to start a little business manufacturing something for export. Rather than wasting your time writing rubish. Muzichedwa ndi kulemba hate stories anzanu a Malawi achina Kachaje, Mpinganjira, Mhone etc ali busy starting businesses, employing fellow citizens and earning the dollar.

  27. andrew says:

    Very thoughtful and insightful analysis my good old friend Mr Jones remains the richer

  28. sukani says:

    Malawi can’t be developed with such kind of writing.In most cases always people blame government which is ruling at that particular time and by looking only the badness of it.sometimes its good to weigh things before putting your ideas on the paper.

  29. sukani says:

    Malawi can’t be developed with such kind of writing.In most cases always people blame government which is ruling at that particular time and

  30. Modie says:

    Great article

  31. munyapa orarhuwa says:

    mbuli nonse awirinu. simukudziwa chimene mukulankhula. kutama peter ndi dpp yakeyi mukupha a Malawi. ndibwino ngati mulibe fundo zoti mulembe kungokhala osakomenta pa nkhani zoterezi

  32. mtumbuka wopusA says:

    iwe Tenthani. Basi

  33. Achimidzimidzi says:

    Mr Tenthani, are you sure these people got a loan to make the Kwacha appreciate, what we were told was that the appreciation of a kwacha is due reduce fuel prices and not on international market but prudence.

    Some people will think you’re criticizing them, yet some of us were just interested to know why the kwacha is behaving abnormally.

    So to me the problem is not the LOAN but the way it was obtained and all the hiding related to this loan.

    Next time if Malawians will demand that all should be, approved by parliament you say Malawians ard

  34. Wawa says:

    Goodall wakalamba akapume achite retire. Ku Mzimba malo ulima alipo ambili.

    Problem is we gotta two oldies at the helm, kumwa tea and kulezebwa spirits gin basi.

  35. marvelick says:

    I was expecting a well articulated article with real facts about govt borrowing, not that useless fare tel!!

  36. Jebison Slindine Nyoni says:

    I like this piece Angoni.

  37. Fathara says:

    OYIMBA AKALE ANAYIMBA KALE KUTI,,, achimwe musawope ngongoleyi mukawopa muzagona ndi njila- mukawona anzanu akukhwasula khwasula zonse amachita zongongola. INE NDIKUTHOKOZA BOMA LA DPP PONGONGOLA NDALAMAZI. PETER SIWOYAMBA KUNGONGOLA NDALAMA, PANALI AKUBA PAMENEPA ACHINA JOYCE TIWONESA ZAKUDA IFE NDIKUMAVUTIKA ZITHU KUMAKWELA SIKU NDI SIKU. KOMA CHIBWELELE PETER NDI BOMA LAKE LA DPP PANO TAPUMA ZITHU SIZIKUKWELANSO NTENGO. CHIMENE TIKUMAVA NDI CHAKUTI MAFUTA ASIKA. BWANA PRESIDENT MUSADANDAULE NGONGOLE IMENEYI TIYIBWEZA IFE A MALAWI, CHIFUKWA CHAKUTI UBWINO WAKE TIKUWONA.

  38. nganga bulawayo says:

    Palibe nkhani spa. Ngati nkhani mulibe its better to keep quiet. Mwamva bambo Tenthani?

    1. Zosautsa says:

      You are so daft that you cannot see the merit and rationale of this story. In short what Govt did to borrow money will not help the country economically.

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