Mwanavekha raps Chakwera’s govt over electricity price hike: Offers solution including salary increase of civil servants
Opposition Democratic Progressive Party (DPP) spokesperson of Finance and the Economy in Parliament Joseph Mwanamvekha has decried the hike in the price of electricity, saying it would have negative ripple effect to the rest of the economy and hurt poor Malawians even more.
Mwanamvekha said this in interview with Nyasa Times in reaction to a recent announcement by the Malawi Energy Regulatory authority (MERA) of a hike in electricity prices by as much as 10.62 percent.
The former finance minister said the price increase is a “sad development “ for the economy because the price of electricity is already high in Malawi and the latest hike will only help to make matters worse, particularly for poor people.
He added that a majority of Malawians cannot afford these prohibitive prices and they will only be forced to look for alternative sources of energy such as charcoal and firewood something that will likely exacerbate environmental degradation, a problem which Malawi is currently grappling with.
“Apart from increasing the production of charcoal, the hike in electricity tariff will also increase the cost of production in industries, which forces companies to pass on this cost to the final consumer.
“The situation will likely trigger a runaway inflation as prices of products and services will rise due to the rising cost of electricity used to power production,” said Mwanamvekha, adding that this rise will hurt the poor most, the very people that government vowed to protect.
Mwanamvekha said this is not the right time for government to raise the price of electricity because the economy has already slowed down due to the effects of Covid-19.
Said Mwanamvekha: “A few weeks ago government raised the price of fuel with over 8.5 percent, a move which triggered a corresponding rise in the prices of other products and services such as transportation.
“As if that is not enough, MERA is now coming with another bad news of a hike in the price of electricity in an economy that is clearly limping. This is obviously too much for a typical Malawian. How do they think people will survive?”
The former Minister of Finance said government ought to have curated measures to arrest what he described as the “ haemorrhage of the economy” because people are going to get hurt.
He suggested measures such as the increasing of buying prices for commodities such as soya, beans, Nandolo, groundnuts and other legumes by State produce marketer Agricultural Development and Marketing Corporation (Admarc) so that farmers are able to cart a decent income from their produce and have some disposable income to spend and to save.
On this point the former Treasury czar said government must encourage and stimulate the production of substitute products to discourage imports and to save forex.
“Under the DPP administration, we had a deliberate policy of encouraging the consumption of home-grown products under the banner of ‘Buy Malawian’. This was a deliberate measure to encourage the consumption of Malawian made products among Malawians. It is a way of stimulating the growth of the economy, and ensuring that more Malawians, particularly SMEs are involved in enterprise.
“Government must adopt and promote this policy if it is serious about turning this country from being a predominantly importing and consuming economy into a predominantly producing and exporting economy,” said Mwanamvekha.
He also added that an effective way to deal with inflation as well as to reduce the flight of forex from the country is for government to quickly negotiate for budget support with the Inteernational Monetary Fund (IMF), adding that the money that comes in the country through budgetary support help in cushioning the economy against the shocks that often come about as a result of lack of forex in a country.
Mwanamvekha further said government must prioritize increasing electricity generation by, among other things, allowing the operation of independent power producers or opening up the energy industry so that there are many players in the production and distribution of electricity as this is one of the ways Malawians can enjoy lower electricity tariffs.
“I am also calling on government to ensure that the K72 billion loan that was promised during the campaIn period to be disbursed through microfinance firm National Economic Empowerment Fund ( Neef) is quickly made available to SMEs so that they begin to play their rightful role as the engine of economic development,” said Mwanamvekha.
He added that the current Minister of Finance, Felix Mlusu, must also increase the salaries of civil servants in the 2021/2022 budget which he is expected to present in June this year so that they have enough disposable income to meet their various requirements.
MERA announced a 10.62 percent hike in the price of electricity on Monday, March 29. Making the announcement at a media briefing, the organisation’s Public Relations Manager, Fiona Khonje said the decision has been made due to developments in the economy, which include the kwacha depreciating by 5.92 percent. Eelier this month, the organization also raised the price of fuel.
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Mwananvekha has to say something, even if it is hot air.
I am eagerly waiting for his comments on the just ended by-elections, especially on DPP’s extremely poor performance.
Koma mkulu ameneyu watitola anakanika kutionjezera ma salaries ali minister of finance lero nde adziyankhula ngati wamzeru? Mumawatolatu ma civil servant anthu a ndale nu
koma naneso kudabwatu. dzana lija anali vwinyilile basi busy kugula ma truck ndi mpaka kubereka mwana ndi kamwana kacikaladi kaja mwa vumbwemu with our tax money. lelo ndikudabwa phokoso komaso mbwerera 2 much
Meanavekha is speaking foolishly and simply for political gain. Raising electricity prices will HELP the poor. How? Because we currently subsidise electricity, but only 12% of the country have access to the grid. Private companies can supply electricity to the grid, but few want to because ESCOM will not pay a higher price to purchase electricity than they sell it for. Thus, by increasing the cost of electricity to the consumer it encourages private suppliers to increase energy production and coverage, meaning a higher electrification rate. This increased rate was also agreed long ago, but was being incrementally implemented. I’m… Read more »
Mwamva za zisankho koma bambo Mwanamveka? Kukhala ngati mukuchita bwino ndithu such that come 2065, oops 2025, ndi landslide kale.
Game kumayiwonela patali. There is nothing like sound economic advice or calls in this submission.
What Mwanamvekha is doing is to try and create an uproar from Farmers and Civil Servants for price and salary increases respectively so that later politicians make calls for premature government changes. His idea is to mobilise masses to challenge government.
Don’t say I didn’t tell you the motive behind this seemingly free advice.
ngat mwafika pomawina masankho amakhansala okha basi…koma nde mwatha
Akukanika kuvomereza kuti snsliza ndipo dpp siizabweraso.olo aphuphe cotani.
akukhala ngati Trump ndi cipani cake ca republican.. kuona ngsti bodza kuti zinalephereka. mxiiiii
He is right but the problem them dpp they failed so it’s had for us to listen to them,the did not care when people were complaining
Mwanamvekha stop your pull down mamerings. At first you blamed government for over expenditure during the first half of the current year. Later you were the first to join the tunnel visioned call for covid allowances to teachers without indicating the source of resources (because you know covid funds are for preventive activities and not allowances). Now you want government to increase salaries following an increase in electricity price. All your ill omened advice is tilted towards over expenditure which you initially rebuked. You are unpatriotic, undemocratic and individualistic. It does not need an economist to note your rotten way… Read more »
Mwafunsa mafunso abwino. We will benefit from his responses.
So you do not support that our income NOW should increase to match the increased cost of living because back in the days DPP did not increase our income? According to your mask, you can be dynamic now because times have changed to give you a governing mandate. Tamuthandizeni bigman kuti apange za Magufuli, uja pamaliro pake anayankhula motamandika uja. Stop focusing on the failures of DPP, build a new vision and focus on it. Basitu muzaona kuti by Chakwera’s second year of second term, Malawi will also find it self in the group of second-class economies. Kulusa kwanuku mukuchedwa… Read more »
All Tonse promises down the drain. These people are liars
mmene dziko lathuli linalili masazs nde a Tose angaliveke lelo ndi lelo?????
anali bisy ma bankweti osatha kukadya phiko lankhuku 3 pin. samusa 1 pin..
let alone kapu ndi mbale yacotsulo 87 grand . kwinako malizannni ma prder ajao. ine the name of Dausi bwana mwini cipani ca dpp. . lets rewind.
glezeda alipo ???????
Nyekhwe for Tonse. ..ndiye chaka sichinathe eishhhh