Of Malawi’s economic woes and its way out

It has come to my concern to address this to every Malawian, especially those of you who have an opportunity to voice out to the public; criticizing the government, clearly pointing out the problems the country is facing, but do not provide solutions.

Political analysts, economist and different CSOs have criticized the government on many issues, calling it inept, but they haven’t provided solutions to the problems we are facing. Articles by different writers have flooded our local newspapers with only problems and not solutions. It seems you are good atpointingout what is there, but do not know how to solve it. Given an opportunity to hold the highest position of the land, you cannot lead us to the shore.

You claim Malawi is suffering from cancer and thus it needs a chemotherapy and not panado, but you don’t say what this chemotherapy is despite stating that the problem is cancer. Could this chemotherapy be getting over with donor aid? Take your time, we will find out.

So I took this opportunity to take a different stance in providing solutions to the economic woes Malawi is facing. Pointing out problems that everyone knows about is the same as saying Peter Mutharika is our president. I mean, who doesn’t know he is our president? The problems will not solve themselves even if you point them out.

And I hear you are still calling us youths “the leaders of tomorrow”. Hell no!! The tomorrow that you used to call in those days is today. Give us a chance. Now if the kids are the future, tell me why you can get more from being a minister than being a teacher?I hope this question in itself is a solution to the education sector.

Let us take a trip down memory lane. How do you see our economic foundation? Is our economic base strong? The answer is a big NO. The foundation of our economy, Malawi as a whole is not intact, that is why the upper part (the successors) is still shaking. Otherwise the successors would be intact in running our economy if its foundation was made strong and intact.

But there is always a solution to a problem. It is clear that Malawians have a fixed mindset that agriculture is the backbone of our economy, with this it is difficult for our leaders to turn the economy around through a structural change. We rely much on a subsistence economy that is affected from time to time and not a manufacturing economy. This problem will be solved if we move from a subsistence economy to a manufacturing economy.

Now one may argue that, you have stated the solution and not how we will arise to that solution. In this case, Malawi is blessed with different resources. Hence, we could utilize these resources in boasting our economy and the need for industries to be manufacturing our own products and be an exporting country. This would helpmitigate further declines in foreign exchange reserves.

Talk of good policy documents gathering dust on shelves. Good long term policies that could sustain growth, but they do not get implemented in the name of “the poor will suffer”.

Whether the poor will suffer or not, but the gist of the implementation is for the sake of the poor and Malawi’s development as a whole. The point is develop Malawi and help that average person who is suffering day in day out. Let the poor suffer for a short period of time, than for the rest of their lives. Of what good is it for the poor Malawi if you implement policies in favor of the rich?

The reforms that you will make should be of great emphasis on simplifying Malawi’s business start-up processes and vividly, decentralization will play a great role in creating a more vibrant private sector. This will attract foreign investors.

Now there is this problem where our poor nation has been mired in a fiscal environment characterized by a large budget deficit and rising debt service cost. Going straight to the point, getting over with donor aid will solve this problem. This is the chemotherapy that Malawi needs.

What you have to know is there has never been a free lunch, hence the rising debt. They call it aid, but it is a loan and we struggle to repay. Understand that the aid puts us on a political and economic pressure where we end up owing the donor country a favour. No country has ever developed through donor aid. The Asian tigers set an example.

What Malawi requires is not donor aid, but investment in developmental projects channelled via purposeful governance. If this is taken into consideration, ask yourselves where Malawi would be in the 10 years to come. Yes 10 years, and maybe even more, cause don’t fool yourselves that these problems can be fixed in a blink of the eye.

Those who share the “Africa Rising” narrative are partly to blame. In our context, Malawi will not rise until it reduces the need for aid. Open your eyes and see. Up to now, are you telling me that you do not know that aid will continue deteriorating our already deteriorated economy? Yes, Malawi can do without donor aid. And I would also urge the government to reduce domestic public borrowing.

Now there is this big issue of foreign exchange and inflation. The high rates of inflation are affecting an average Malawian. Inflation is closely related to the interest rates, which can influence exchange rates. Inflation is more likely to have a significant negative effect, rather than a significant positive effect on a currency’s value and foreign exchange rate.

Now whether you like it or not, in order to kill this relationship between inflation and foreign exchange and hence reduce the inflation rate, we need to use the fixed exchange rate where the government will tie the official exchange rate to another country’s currency.

Don’t let these whites decide prices for our own commodities as if it is theirs. Let us act as educated people, time should guide us. The fact that they are white shouldn’t be the reason to plunder our economy. Malawi at 51.

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7 years ago

Most of the things I wanted to say on this article have been pointed out by the “Analyst”. The author is just a clueless kid who has lots of theories in his head but has never implemented or seen them implemented somewhere. He is like APM, saying one thing and doing another. He says people are not offering solutions, but goes on to quote articles that offered the solutions! Such bull!

7 years ago

#Analyst, you are just right on point and I was about to ask the same. He has made reference to articles like that of Henry Kachaje where he mentioned of the need for chemotherapy treatment and not panado. The author has just shown his/her lack of comprehension. I mean didn’t he or she able to decipher some solutions from such articles? Well, that said, I should also remind the author, that the first step to solving a problem is first understanding the problem itself. You cannot solve a problem without knowing that there is a problem and the understanding of… Read more »

The Analyst
The Analyst
7 years ago

O……………………………………………………………………………………………………………………………………………………………………………………………………………………O On a lighter note . . . . . . the definition of fixing the exchange rate being pegging or tying the movement of the domestic official foreign exchange rate to another country’s currency (as postitulated in the last but one paragraph) is as flawed as fundamentally weak and therefore as wrong, absolute; . . . rather, determining a band or corridor or path (ceiling and flow) within which the domestic currency is allowed to fluctuate (appreciate or depreciate) i.e. fixed percentage points by which the exchange rate can deviate from a perceived average or target. . . .… Read more »

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