Malawi used to have a reasonable industrial base with a number of industries that produced goods for local and foreign markets before 1995. For example, Press Clothing used to manufacture quality clothes for local and international markets. Admarc used to have a number of subsidiary companies such as Grain and Milling which added value to its core function as the major buyer of farm produce.
However, the UDF government destroyed “everything” President Kamuzu Banda left after 1994. Many companies were shut down while others were sold to capitalists in wanton IMF/ World Bank-sponsored privatization programme which turned out to be a failure. Many Malawians lost their jobs and were pushed to the fringes of life.More than 20 years after the so-called restructuring of the economy, poverty has worsened, inequality has widened and the economy is in a crisis. Post 1994 has also given birth to corrupt politicians and public servants who get rich quickly at the expense of the poor. They connive with the private sector to defraud government of billions of kwacha through tenders some which are dubious.
As if these are not enough problems, government is doing very little to turn Malawi into a producing and exporting country. Government is obsessed with attracting foreign investment instead of using resources to establish new local industries and support the existing ones to boost the economy. So far, it is only Kamuzu Banda who recognized the importance of the role state-owned enterprises play in national development.
It is a well-thought-out suggestion by the Malawi Investment and Trade Centre (Mitc) for Admarc to revert to the commercial side of the market to address the export gap. According to Mitc Chief Executive Officer, Clement Kumbemba, there are few Malawian companies that are in export business. He said Mitc has huge orders from various countries within Africa and beyond, but not much is done to export against the huge orders that they get. He expressed the “desire to see the commercial side of Admarc back on the market to mop out all products from farmers and help to improve prices”.
If there are a lot of external orders that Malawi is failingto meet because the private sector is not taking up the challenge, is this not enough justification for Admarc to take a leading role in the export drive? It is clear that the private sector is preoccupied with other business ventures other than agriculture.
The commercial side of Admarc should not only be confined to exports, but extended to agro processing industries such as juice making and food production for both local and international markets. It should be turned into a conglomerate for food production. For example, Admarc can start producing a variety of breakfast cereals from maize instead of exporting it raw, and can also revive producing mealie meal. It was a huge mistake to sell Grain Milling. A developing country like Malawi needs institutions like Admarc to assist in national development through value addition.
Government has been talking about boosting exports for a long time. But there is very little happening on the ground.Admarc can legitimately take advantage of such opportunities to boost export demand. Mitc should discuss the idea with Admarc management and its board to take up this challenge. It is perfect for the parastatal to revive its commercial activities in the interest of the country.