Malawi’s industrial downsizing increases, commodity rationing begins

The Malawi industrial sector continues to shrink as manufacturers lay off more people each month as a way to cut wage bills in the wake of acute forex shortages that has led to importation of few or no raw materials used for production.

This is occurring just few weeks after Nyasa Times reported that companies in Malawi have dropped their output by 20 percent as manufacturers don’t have ability to import raw materials, the mainstay of the industry, thereby impacting negatively on production capacity.

Because of the diminishing production lines some major shops in the capital city Lilongwe have started sales ration of sugar with customers being told in the face that they cannot buy more than 5 packet of 1kilogramme of the commodity.

This is Malawi: In search for soft drinks

Malawi Congress of Trade Unions (MCTU) said they are compiling figures to quantify the impact on how many people have been fired because of primary and secondary effects from the forex shortage this year.

The mother union said it estimated that the number of those fired due to the crisis is more that the  400 industrial workers that Commercial, Industrial and Allied Workers Union (CIAWU) disclosed recently.

They said this is because the forex shortages has led to acute reduction demand of wide range of products and services on the market almost all sectors of the economy have been hugely hit.

The rationing of commodities has also affected soft drinks sales as consumers are told by Carlsberg Malawi depots not to buy more than 3 crates of the drinks.

For the sugar, sources in the trade ministry and sugar business say government has piled pressure on Illovo to maximise production for export sales as a way of getting more forex in Malawi.

All this is happening at a time when cost of living and inflation are on the rise with a recent monthly survey from Centre For Social Concern showing that average Basic Needs Basket comprising food and no-food items for a family of six for Mzuzu, Lilongwe, Zomba and

Blantyre increased to K61, 778 in November from K57, 407 in October, 2011.

Many are highly concerned with the price rises of maize, a staple food for Malawians and bread, a commodity mostly used by urban dwellers.

In other words those laid off would be worse off as they struggle to earn a living with rising costs of living.

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