CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
by Patrick Mawaya, Malawi, August 1999
THEME = ECONOMY
Fuel prices have gone up, so transport fares have also been
increased.
Now bread and other basic foodstuffs are having their prices
adjusted upwards on a daily basis. Such is the reality of life in Malawi,
as the country faces its worst-ever economic crisis
Malawi is a poor country with a per capita GNP of only US $220, less than half the Sub-Saharan Africa average, according to the World Bank. The World Bank also reports that Malawi's income inequality is the highest in Africa. Life expectancy at 43, is 9 years less than the average for Sub-Saharan Africa. The prevalence of HIV/AIDS and child mortality are among the highest in the region. Less than half of the population have access to safe water and only two-fifths of the population is literate.
Malawi is on a downwards trend. The prevailing interest rate is high, wrecking everybody's chances, including the productive sectors of the country. Unemployment has surpassed historic records each new month and no one is spared. Those who are employed in the tobacco factories in the capital, Lilongwe, consider themselves lucky, as many others are losing their jobs with businesses closing down everywhere.
President Dr. Bakili Muluzi has said that Malawi is now a liberalized economy, open to market forces. The economy has however been liberalized at the expense of living conditions of the masses. Market forces guide our living. Dressed chickens now come from Zimbabwe for Malawi cannot afford to produce chickens due to the high cost of animal feed. The poultry industry is all but dead.
A kilo of meat now cost US $2. And a loaf of bread US $0.50.
Yes. Everyone in Malawi is feeling the pinch. The state of the economy is pushing Malawians to the point where only the fittest will survive.
Malawi is woefully lacking in adequate infrastructures. Transport costs are among the highest in the region - some say almost two- and-a half to three-times higher than those prevailing in South Africa and Zimbabwe. The poor state of telecommunications is characterized by people having to wait as long as ten years to be connected to the telephone system.
Malawi's Electricity Supply Company (ESCOM) is unable to provide a reliable power service. This results in losses to industry of more than US $100 million per year.
President Muluzi has vowed to fight corruption tooth and nail. He has said: "We shall fight corruption wherever it rears its head because corruption is an evil." But political analysts do not take the President seriously knowing that since he established the Anti-Corruption Bureau, clear cases of corruption have not been prosecuted.
Arnold Munthali, 23, is a fourth year student at Chancellor College, a constituent college of the University of Malawi. He says: "Corruption is taking an upper hand in our society. We are slowly accepting it as a norm in our country. We have the Anti- Corruption Bureau (ACB) but it appears to be "anti- corruption" just in name. It's time we make the ACB totally independent from government".
Munthali also looks at the role of the Opposition and the civil society in addressing corruption. He says: "I am a bit sceptical about the Opposition's role, because it appears that in Malawi we view the Opposition as something that is not needed. The Opposition and the Government view each other as enemies. There is no working together on the issue of eliminating corruption. Here, the Opposition should be helping the government."
The Consumers Association of Malawi (CAMA) plans to engage prosecutors to handle corruption cases besides the ACB. According to CAMA's Executive Director, John Kapito, "corrupt practices harm the country's ailing economy. It is destroying the fibres of our economic base. In the end, the losers are ordinary people."
Despite pledges by both President Muluzi and Finance Minister Dr. Cassim Chilumpha that the UDF Government would institute fiscal discipline, government has been overspending. On this Arnold Munthali says: "The most likely form of overspending is external travel by Ministers. We have to accept that we cannot isolate ourselves from the international scene but before taking part in conferences overseas we should assess the use of each and every conference and ask ourselves, "will this conference benefit Malawi?""
The other critical issue that Malawi will have to look at seriously is that of Structural Adjustment Programmes (SAP)s. Malawi started implementing SAPs in 1981 with assistance from the International Monetary Fund (IMF) and the World Bank. But it has been observed that when SAP programmes are put forward, the local fiscal authorities and other interested parties (from both the public and private sectors) are not involved. When it came to hard decisions having to be made, it was the IMF and the World Bank which applied the shock-treatment - not Malawi. And despite the country having implemented SAPs for eighteen years, there has been no significant change in the structure of the economy. Worse still, the country has been implementing policies encouraging people to consume rather than produce.
The future of Malawi's economy is bleak and Malawians are waiting to see if Muluzi will "produce the goods", as far as the economy is concerned. He has said that his first five years in office were for laying the foundation for the real work to begin. Let's see if he will fulfil his promises.
END
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