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Malawi pins its hopes on bumper tobacco harvest

somervilleafricajournalism — Tue, 09 Apr 2013 11:49:04 +0000

mabvutojobani • April 8, 2013

Tobacco growers weigh their crop before heading to the market

Malawi’s earnings from Tobacco have reached $15.1 million in the fourth week of sales, a 200 percent jump compared to the same period last year. The Tobacco Control Commission (TCC) said that during the first four weeks of last year, Malawi only earned $5.3 million. This is good news to a country so dependent on the crop which accounts for 60 percent of foreign earnings and employs over 2 million from its related industries. TCC figures also show a significant improvement in the average price during the same period, which has moved up to $1.35 compared to $1.14 last year.

Finance Minister Ken Lipenga said that his team is pinning its hopes on good prices at the auction floors and a bumper maize crop to help stem runaway inflation and improve the foreign reserves position which is at 0.9 months – far lower than the recommended three months cover. Malawi consumes $188 million per month which is 62 percent of the $300 million the country expects to earn from tobacco this year. Last year, the country earned $177 million in foreign exchange, the lowest in a long time. mabvutojobani

Mixed record for Joyce Banda's first year in office

somervilleafricajournalism — Tue, 09 Apr 2013 06:44:36 +0000

Deutsche Welle/allAfrica

Joyce Banda, Malawi’s first female president, has been marking her first year in office since she came to power after the death of President Bingu Wa Mutharika in April 2012.

Thousands of Malawians on Sunday (07.04.13) joined Malawi’s President Joyce Banda as she celebrated her first year in office. She was sworn in on April 7, 2012 after President Bingu Wa Mutharika died of cardiac arrest.

Africa’s second female president came to power in accordance with provisions in the constitution which require that the vice president should take office automatically on the president’s death.

Among the challenges President Joyce Banda inherited was the country’s deteriorating economic situation, which was partly brought about by the unfavorable relationship between the late President Bingu Wa Mutharika and external donors.

When President Banda was sworn in, many Malawians hoped would fix the country’s economy. But one year on, opinions over whether she has succeeded in improving country’s economic outlook are divided.

Painful austerity measures

Her decision to devalue the local currency, the kwacha, in a bid to stabilize the economy, was hailed by the International Monetary Fund (IMF) but led to protests at home, including a nationwide strike by civil servants in February.

The civil servants were demanding a pay raise of more than 65 percent, saying that the devaluation has caused inflation which had seriously eroded their salaries. The price of maize, sugar and salt and services had more than quadrupled, they said.

According to the Centre for Social Concern, a local research institution investigating the cost of living in urban Malawi, the food situation in the country remains dire.

In a country where the minimum monthly wage is about $20 (15 euros), a family of six needs an average of $200 per month to meet their basic food needs.

One Malawian resident who is unhappy with President Banda’s economic reforms is Clement. He told DW that she had failed Malawians. “Since Mutharika died, the inflation has risen from 7.9 to 37.9 percent, meaning our lifestyle is being affected,” he said.

Drugs and maize instead of celebrations

Abel Mwanyungwe, economic lecturer at the University of Malawi, believes it was wrong of President Banda to spend money on celebrating her first year in office. The funds should have been used to supply Malawians with bare necessities.

“Why celebrate when people are suffering? Drugs are scarce, can’t the president use the money to procure drugs and maize?” he asked.

But some Malawians think Banda has achieved a lot over the last 12 months, including bringing more donor aid into the country, ending the fuel crisis and forex shortage after consultations with the private sector.

One Malawian resident, Bettie, told DW that Banda had “made tangible decisions such as signing the power interconnector with Mozambique, renewing vital diplomatic ties with the UK, Zambia and Mozambique.”

Other moves that have earned her praised in some quarters include selling the presidential jet and awarding civil servants a pay rise after they called a strike.

But the opposition in Malawi is watching her very closely and they have a majority in parliament. Banda recently ordered the trial of a group of government officials and former ministers from the previous administration on treason charges. She is expected to seek election as president in May 2014.

Some analysts say the trial of these top 12 officials could have impact on her campaign.

It also could be a catalyst for further unrest as Malawians are expected to face yet more food price increases later in the year. reuters

Malawi - currency fall fuels maize smuggling and food shortfall

somervilleafricajournalism — Sun, 03 Mar 2013 14:08:50 +0000

IRIN

Maize smuggling creates hunger in Malawi

Photo: Sanje Msiska/IRIN

Consumers line up to buy maize at a market in Rumphi

MZUZU, 1 March 2013 (IRIN) – Every morning, Bernadette Kilembe, from the northern Malawian town of Karonga, is confronted with two related problems: She has to keep her restaurant running, and she has to feed herself and her three children.
Exacerbating both of these problems is the cost of maize – Malawi’s staple food – which has become unaffordable.
Between June and October 2012, a 20-litre bucket of maize cost her between 500 and 750 kwacha (about US$1.50 to $2). Now it costs 3,000 kwacha ($8) a bucket.
“That is only enough to produce two meals for me and my children,” said Kilembe.
In a good year, Kilembe grows enough maize in her garden to supply her restaurant and feed her family, but dry spells during the 2011-2012 growing season wilted her crop. Unreliable rainfall is nothing new in Malawi, but in the past, Kilembe could purchase affordable maize from local vendors. This year things are different.
During and after the 2012 harvest, cross-border traders offered farmers in the area much better prices than those offered by local traders.
“Most of the farmers here thought if they sold their maize and kept the money, they would be able to buy from the market once the maize they stored for their own consumption was depleted,” said Masuzgo Zowani, a community worker and subsistence farmer from Chirambo, in western Rumphi District.
“Unfortunately, they did not know that they were creating a gap in the supply of maize both in their area and the country generally because those who offered the better prices took the maize out of the country. Now they can hardly afford the maize that is found on the market.”
Exports banned
A ban on the export of maize from Malawi was implemented in December 2011, when it became apparent dry weather threatened to cause a maize shortage.
But the ban has not prevented traders from smuggling maize across the border into neighbouring Tanzania and Mozambique, where the weakening of the kwacha against the dollar has made Malawi’s maize attractive to buyers.
“When trucks bring bags of maize here [from surrounding areas], it is not meant for our market,” said Kilembe. “We don’t know where it goes, as the maize often comes late in the evening when we are about to sleep and it is not [there] by daybreak.”

“When trucks bring bags of maize here, it is not meant for our market. We don’t know where it goes, as the maize often comes late in the evening…and it is not [there] by daybreak”

Dan Msowoya, a spokesperson from the opposition party the Alliance for Democracy, blamed the boom in cross-border trade on the state-owned grain marketer, the Agricultural Development and Marketing Corporation (ADMARC). In recent years, ADMARC has not received sufficient budgetary support to buy surplus maize from farmers, store it and then resell it, leaving the task in the hands of a private conglomerate called Mulli Brothers.
But farmers complained that Mulli Brothers did not offer them good prices, and as a result, many sold their maize instead to cross-border traders, not even keeping a portion of the crop for consumption.
Government officials are now urging communities to stop selling maize to cross-border traders, regardless of the prices they offer, but the message seems to have come too late.
Police corruption?
Efforts by local police to stop the smuggling of maize into Tanzania have been largely unsuccessful.
“When we increased manpower on land and impounded trucks carrying maize, the smugglers started transporting the maize on bicycles, and it would appear as if it belonged to an individual who was taking it home,” said Karonga police station officer William Kadzayekha.
“But once we busted that, they started smuggling the maize in boats via Lake Malawi and connecting to Songwe River. We know that they are doing this, but we cannot do anything. We have officers who trained as marine experts, but there are no boats for these officers to use.”
Many local people in Karonga blame the police for letting maize pass through roadblocks, allegedly in return for bribes.
“We have a number of roadblocks from Karonga to the Songwe border post. Police are manning these roadblocks, yet food crops such as maize continue to cross the borders. One wonders how this could happen if it is not [that] the police have pocketed bribes,” said paramount chief Kyungu, the most senior traditional authority in Karonga and Chitipa districts.
Locals have engaged the police in battles over the issue, even chasing them from roadblocks. But while this may have slowed the movement of maize by truck, it has not affected transport by boat. On a recent night, IRIN witnessed maize being loaded onto boats on Lake Malawi just a few hundred metres from the Karonga police station.
Supply and demand
Malawian cross-border businesspersons buying goods in Tanzania for resale in Malawi have also reported seeing huge piles of maize at the Tanzanian border town of Kasumulu. It is believed that the maize is repackaged there for transportation further on in the region.
“The maize piles we see there are usually more than what we see on the Malawian side,” said Grace Kumwenda, who buys wares in Mbeya, Tanzania, and sells them in Mzuzu.
Economist Henry Kachanje says the rising market cost of maize is simple supply and demand: As more maize is smuggled out of the country, supply in the Malawian market dwindles and prices go up.
Currently, most ADMARC markets across the country do not have maize stocks. When limited stocks do come in, they are rationed; the amounts sold are as little as 5kg per person.
The government’s 2012 decision last year to replace fuel price subsidies with automatic fuel price adjustments – in which the cost automatically reflects global price fluctuations – has resulted in record high fuel costs, which private traders of maize are also transferring to consumers. – See more at: http://www.irinnews.org/Report/97571/Maize-smuggling-creates-hunger-in-Malawi#sthash.ATxlr5aq.dpuf

Malawi public service strike leads to suspension of flights from Kenya

somervilleafricajournalism — Tue, 26 Feb 2013 17:39:48 +0000

East African Business Week

NAIROBI – Kenya’s national carrier Kenya Airways has suspended all flights to and from Malawi in the wake of a crippling strike by public sector in the southern African country. The ongoing strike, one of the most serious, has paralyzed operations in major economic and social installations in the country. Kenya Airways operates 10 flights a week to and from the Malawi’s capital, Lilongwe and the suspension is seriously expected to affect the business community in the two countries and those connecting to other southern African countries. A terse statement from Kenya Airways said the suspension will be in place until the situation in the country normalizes. Other affected airlines include South African Airways and Ethiopian Airlines. “All flights to and from Malawi have been suspended until further notice,” said the statement sent to media outlets and posted on the Kenya Airways official website. Currently, the main airports in Malawi Kamuzu International Airport and Chileka International Airport have been shut following the biting strike. Sources from the southern African country indicated that the government had initiated talks with workers union officials but there was no indication yet on when the strike will be called off. Over 100,000 workers are currently participating in the nationwide strike since last week paralyzing key government functions. The Malawian government is facing a major challenge torn between meetings the workers’ demands on the one hand while at the same time sticking to the International Monetary Fund-backed austerity measure. EABW

Malawi - Joyce Banda caught between saving the economy and winning elections

somervilleafricajournalism — Fri, 15 Feb 2013 13:13:55 +0000

African Arguments by Jimmy Kainja

Joyce Banda juggles international and domestic priorities as elections approach in 2014.

Last October the president of Malawi, Joyce Banda, told European Union delegates in Brussels that she was ready to sacrifice her political career for economic reforms in the country. Banda was mainly referring to a 40 percent currency devaluation that her administration implemented a few weeks after its ascendency to power on 7th April last year. This followed the sudden death of her predecessor, Bingu wa Mutharika, who succumbed to a heart attack two days earlier.

Banda’s Brussels statement sounded very patriotic, statesman-like and reminiscent of a great leader – she may yet be any of these. But in this context, the statement underlined a conundrum that has, thus far, been the defining feature of President Banda’s leadership.

The Malawian economy is almost entirely dependent on grants and donations. Banda has admitted that without outside help the country is in dire straights. Having inherited an economy on the verge of collapse, after being deserted by donors due to Mutharika’s poor diplomatic relations, perceived arrogance and deteriorated human rights record, Banda is only too aware of the importance of continuing to keep them sweet. The situation has given donors bargaining power, which has forced Banda to accept their advice, including IMF austerity measures willy-nilly. Banda recently told a Guardian documentary that “if our friends and international partners do not come, if they packed up today and left, we are dead.”

The donor prescribed economic measures have not always been popular locally; this is a problem for Banda because she cannot afford to alienate the donors or the people that give her a mandate to govern. She has already witnessed Mutharika’s fall from grace after failing to negotiate such a conundrum. Mutharika saw donors walking out on him and died a hated figure at home, to the extent that a section of Malawians celebrated his death – something unheard of in the country’s traditions.

The problem of having to please two parties whose demands are not always mutual is that eventually something will have to give – hence her “I am ready to sacrifice my political career” assertion. Yet Banda is not sacrificing herself just yet and is fighting hard for her political career. In doing so, she has had to master the art of political doublespeak and would never make a statement like the above whilst in Malawi – where all her speeches are crafted to fit in with her ambition of winning 2014 elections. I previously made a case that the Joyce Banda the world sees may not be the one Malawians know.

Upon her ascendancy to power she made sure she reversed all the Mutharika era policies that were frown upon by donors – something Malawians were generally happy to accept. She has done it with some considerable success and is enjoying a lot of good will from the international community. The currency devaluation that her predecessor staunchly refused to do has been her most visible concession to the donors, especially the IMF. This is also crucial insofar as her ambition to attract badly needed investors in Malawi is concerned.

Some economic challenges have somewhat eased, especially fuel and foreign currency shortages – though increasingly expensive and unaffordable for many people due to high inflation rates. But a big majority of Malawians agreed on the necessity of the currency devaluation; it was well overdue and it was inevitable if the economy was to get back on track.

The contentious issue, however, has been its implementation – particularly the lack of proper measures to cushion poor and vulnerable people from its effects. Another related issue is the pegging of the Kwacha to the US Dollar, which in the last seven months has seen inflation rising from 20.1 per cent to 21.7. This makes it the highest inflation rate in SADC (Southern Africa Development of Community). This is also the lowest the Kwacha has been since 1993, when the country was undergoing transition from one party state to multiparty democracy.

Last month, the consumer rights group (Cama) organised a national protest against the rising cost of living. They delivered a petition giving the government an ultimatum of 21 days to address the issues raised or face more protests. The Civil service trade union has also warned that its members will stage a sit in protest on 11th and 12th February. They are unhappy about the working conditions of civil servants, poor salaries and the government’s apparent lack of interest in addressing these problems.

Currently there is also worrying drug shortage in hospitals which, according to the ministry responsible, means hospitals are lacking 95 percent of the supplies they need. A few weeks ago 15 concerned doctors from Kamuzu Central Hospital, a referral hospital in the capital Lilongwe, signed an open letter to president Banda asking for her intervention. The doctors said that the situation had forced them use their personal money to buy basic medical necessities for patients.

Some civil society groups have questioned why the government intervened swiftly to supplement the farm input subsidy programme (fisp) when it fell short earlier this year but is yet to stage a similar intervention in the health service. The government has since promised a procurement of drugs – the first since 2009.

The answer may be that politically Fisp is a crucial programme. The Majority of beneficiaries are from the rural population who form the majority of the voting block. Approximately 86 percent of Malawians live in rural areas. Mutharika’s landslide in 2009 elections is largely attributed to the subsidies programme. Joyce Banda’s decisiveness on fisp and demonstrably lax approach in other areas of the economy is an indication of her seriousness about the 2014 elections. She is uncertain about her chances, because of the struggling economy, but also because she has never before contested an election as President and the political party she formed two years ago, after she was expelled from Mutharika’s then party, will be facing its first elections.

Balancing working with the donors – whose economic recovery policies are clearly hurting Malawians (whose votes Joyce Banda want in 2014) – is the President’s main priority. It has been a defining feature of her first 10 months in power and will remain the case, especially as the country draws closer to elections day.

Jimmy Kainja’s is a longstanding social & political analyst of Malawi & sub-Saharan Africa. You can follow his personal blog at Spirit of muntu and on twitter@jkainja

Malawi increases petrol and electricity costs blaming currency fluctuations

somervilleafricajournalism — Fri, 09 Nov 2012 10:10:36 +0000

mabvutojobani

Malawi has hiked fuel pump prices and electricity tariffs citing the weakening local currency against major currencies like the dollar and the Southern African rand, Malawi Energy Regulatory Authority (MERA) said in a statement on Friday.

Petrol has gone up from $1.7 per liter to about $2.2 per liter while diesel is now selling at $1.99 per liter from $1.7 per liter.

The latest increases in energy prices is expected to fan commodity price increases for the southern African nation already facing soaring food prices and a sputtering economy.

The hike in pump prices of fuel is the second one this year.

Rising inflation also forced MERA to increase electricity tariffs, for fhe second time since the last adjustment in May.

“The combined effect of the movement of the exchange rate and inflation has negatively impacted Escom’s [Electricity Supply Commission of Malawi] financial position.

Escom has to raise more money in local currency to meet existing foreign currency obligations to it’s suppliers and lenders,” MERA said in the statement.

Malawi’s inflation rate accelerated to 28. 3 percent in September from 25.5 percent in August.

Malawi - donors call for sacrifices to help economy

somervilleafricajournalism — Fri, 21 Sep 2012 07:56:23 +0000

mabvutojobani

Everybody, including the privileged few, must sacrifice for Malawi to recover from the current economic slump, the Common Approach to Budget Support (Cabs) has said.

Last week fuel shortages hit the country again especially the capital Lilongwe a reminder that Malawi is yet to recover from the economic downturn
Cabs chairperson Asbjørn Eidhammer, who is also Norwegian Ambassador to Malawi, said this in an exclusive interview with The Nation this week.

The remarks, by a group of Malawi’s donors that provide harmonised general budget support to the country—up to 30 percent of the national budget—coincide with The Nation’s revelations on Tuesday that President Joyce Banda’s trip to the United Nations (UN) General Assembly in New York in the United States will cost taxpayers about K308 million in air tickets and allowances for her and he 40-plus entourage.

Expenditure critics say this is a luxury the gasping Malawi economy and the tattered public purse cannot afford. Frequent internal travel with huge entourages by President Banda and her deputy, Khumbo Kachali, have also projected the image of an administration obsessed with visibility—even from mundane public events fit to be presided over by senior civil servants—at the expense of the larger population.
The Cabs’ call for sacrifice also follows Malawians’ anger at the recent 80 percent increase in Cabinet ministers’ accommodation allowances at a time the People’s Party (PP) administration is preaching austerity for everybody while the ruling elite live large.
With The Nation establishing that Britain and Germany will not give Malawi budgetary support until 2015, the administration may need to walk its austerity talk.
“Sacrifices have to be made and I think it is important from our [donors'] point of view that although we assist in mitigating those sacrifices and the negative impact particularly on the poor, everybody will have to be prepared to sacrifice and that goes in particular also for the privileged,” Ambassador Eidhammer said.
His remarks, although not directed at this week’s K308 million expenditure for the UN trip, may resonate well with sentiments on social media and other platforms that the leadership has to cut spending.
In an open display of opulence, Banda is reportedly staying at the Wardoff Astoria Hotel in New York, with accommodation costing between $1 500 (K450 000) and $15 000 (K4.5 million) per night, a far cry from expenditure controls government is preaching.
When Mutharika slept at the same hotel two years ago, he was widely criticised because at the time his government was implementing austerity measures to rein in on expenditure.
Eidhammer, whose country is one of Malawi’s leading donors and is among the few intending to contribute to budget support to the 2012/13 budget, said, however, that most donors are impressed with the bold steps Banda has taken to put the country on the recovery path.
He, however, cautioned that the recovery will take more time “because it is not an easy thing to do.”
“We have seen how Western countries are struggling to get recovery in their economies; so it takes time, it is not an easy thing to do…I do not agree necessarily with those who are criticising government for not getting its act together,” he said.
In an apparent response to comments by both the Minister of Information Moses Kunkuyu and Finance Minister Ken Kandodo that it is time for donors to act on their pledges, Eidhammer said they have stuck to their timetable and budget support as agreed.
“I would also like to correct the impression that the donors are not coming forward. Some large donors have fast-tracked their support in main sectors and programmes to mitigate the impact of the economic situation on the less fortunate are now in place. Budget support has so far been released in accordance with what was agreed in the CABS review …” he said.
President Banda has in the last four months also tried to win Western support by rolling back Mutharika legislation seen as suppressing human rights.
She also devalued the kwacha by about 49 percent against the dollar and removed the currency’s peg against the dollar, which has seen the local unit depreciating further by another 20 percent. Banda has also liberalised fuel prices, water and power tariffs, a move that has seen rates rising dramatically. Read more…

Malawi tobacco earnings up 150 per cent

somervilleafricajournalism — Fri, 15 Jun 2012 14:54:05 +0000

Today in Malawi

Tobacco earnings have improved to $100.2 million (about K25 billion) as of Thursday, 14th June, 2012, which is 150 percent higher than what was earned during the same period last year.

President Joyce Banda at tobacco auction

Tobacco is Malawi’s mainstay but in recent years earnings have been low resulting into a severe foreign currency shortage in the formal financial market that in turn adversely affected importation of fuel and phamarceuticals.

Dollars from tobacco, which rakes in 60 percent of total foreign exchange currency, are currently being channeled to commercial banks in latest economic reforms by the new government.

Last year, tobacco continued to claim a top most export product which was worth K88.9 billion representing 40 percent of Malawi’s total export to the world.

“As you can see from these latest statistics, the market is being characterised by a lot of stability as there is a pick-up in both prices and proceeds from the sales of tobacco,” said the Tobacco Control Commission (TCC) of Malawi chief executive officer Dr. Bruce Munthali on Friday. Read more…

Malawi: New Government, Old Problems

nyumbayathanziblog — Wed, 11 Apr 2012 20:10:28 +0000

Deaths of a sitting president are very rare. Therefore it is not particularly surprising that the death of Malawi President Bingu wa Mutharika on 5^th April after suffering from a heart attack has been Africa’s top story for days. Foreign governments have sent condolences and 30 days of morning has been declared in Malawi.

Ironically, there has never been a high profile death in Malawi so celebrated by people than Mutharika’s. Malawians had enough of Mutharika: he has left a nation mired in deep economic problems and tattered diplomatic relations with some of its traditional donors and aid providers. The country has been suffering from lack of fuel, perennial power cuts, lack of foreign exchange and raising unemployment.

These problems have contributed to unaffordable living standards in a country where 76% of the population leave on less than a Dollar a day. The aid withdraw by Britain last spring following a diplomatic spat by the two countries hit the Malawi particularly hard. It left a gaping hole in the country’s annual budget, 40% of which is donor funded.

Many Malawians therefore see the death of President Mutharika and ascendance to power of his far more popular deputy Joyce Banda as a blessing and an opportunity to start afresh. And President Banda has had an assuring start: she has replaced Inspector General of Malawi’s much feared police service; she has replaced a governor of the central bank and she has assured the nation that she intends to mend all the broken relations with international community and donors.

She is likable and friendlier than Mutharika. She will surely get on with the international community but the fact remains that she has inherited problems that will not go overnight. In fact the economy may get worse before it can be stabilised. Mutharika has left unstable currency that is officially pegged at 267 against the Dollar while on the black market the same currency trades at 300 – 400 against the Dollar.

This has affected prices of basic commodities. The truth is that what is universally defined as a basic commodity can be a difference between life and death, especially among children; it makes a difference between a child attending school or it. For the last 6 years we have had a first hand experience of this at Nyumba Ya Thanzi: good nutrition is a key difference between life and death among kids.

Yes, the new government has brought hope, which the country badly needed but it is imperative that the current euphoria in Malawi does not mask the everyday realities. People that needed help before the change of government still needs it – sadly at a higher cost than before, as a result of the economic turmoil.

Written by Jimmy Kainja

Malawi: Banda replaces bank governor and other officials

somervilleafricajournalism — Tue, 10 Apr 2012 19:28:34 +0000

Mail and Guardian

Malawi’s new President Joyce Banda on Tuesday unveiled a shake-up of top officials charged with government finances and media, purging loyalists of the late leader Bingu wa Mutharika.

“Although we are in mourning, certain decisions cannot wait,” Banda told a news conference in the capital Lilongwe, three days after taking office.

She also announced an investigation into the mysterious murder of student activist Robert Chasowa. Mutharika’s critics have accused police of staging a hit against Chasowa, implicating former police chief Peter Mukhito, who was sacked on Monday.

“As a mother, I feel for my fellow mother who doesn’t know what killed her son. I understand how painful it is, and I will make sure we find out who killed our son Chasowa,” Banda said.

“We don’t want people to go about murdering people fearlessly.”

Top among Banda’s new appointments was Mary Nkosi as Reserve Bank governor, making her the first woman to hold the job.

A long-time deputy governor, she replaces Perks Ligoya, a close ally of Mutharika who pursued a rigid exchange rate policy that the International Monetary Fund has blamed for much of Malawi’s economic woes.

She named a new secretary to the Treasury, appointing career bureaucrat Radson Mwadiwa, who also becomes chairperson of the state-owned Malawi Savings Bank.

Banda sacked Patricia Kaliati, the information minister who publicly insisted that Mutharika was alive more than one day after his death on Thursday. Read more…

Malawi’s new president must build support and mend donor relations

somervilleafricajournalism — Tue, 10 Apr 2012 09:39:36 +0000

African Arguments by Keith Somerville

President Joyce Banda

Monitoring from afar the Malawian reaction to the death of President Bingu wa Mutharika and the inauguration, after a brief succession struggle, of Joyce Banda as the new president I couldn’t help being reminded of a Private Eye cover from September 1966 after the assassination of South African President Hendrik Verwoerd. The cover reporting his killing showed celebrating Zulus with the headline “A Nation Mourns”. While there weren’t many exuberant demonstrations of joy at his death, there was little mourning, and within hours of Joyce Banda’s swearing in, Malawian bloggers were joking about the attempts by the late president’s brother and his supporters to carry out a constitutional coup. One blogger said Malawians shouldn’t have worried that Peter Mutharika would take over as he didn’t have a B in his name – all Malawian presidents have had a B: Kamuzu Banda, Bakili Muluzi, Bingi wa Mutharika and now Joyce Banda.

On a more serious note, it was touch and go whether there would be a smooth handover of power on the sudden death of President Mutharika from a heartyattack on Thursday 5^th April. Close political allies (his wife and brother were both members of his cabinet) had his body flown to South Africa without reporting his death to Malawians. Rumours abounded – blogs and news websites reported variously that he was already dead, that he was alive and to receive emergency treatment in South Africa or that he was dying and was flown out of the country to hide his death and enable leaders of his Democratic progressive Party (DPP) to prepare a succession plan. Another report – seizing on the constant power cuts due to the broken down electricity network – said he had to be flown out of Malawi as it didn’t have a working, refrigerated morgue

In the meantime, the late leader’s closest family and allies started putting together a plan to prevent Vice-President Joyce Banda from taking over, as the constitution required. Reports emerged that leaders of the DPP had endorsed Foreign Affairs Minister Peter Mutharika who, for the previous two years, had been very clearly groomed by his brother to take over when the latter’s second term as president expired in 2014.

The decision seems to have been reached at a meeting held at the house of the Energy Minister, Goodall Gondwe. Soon after the meeting, the Information Minister Patricia Kaliati said Vice-President Joyce Banda couldn’t become president as she had been expelled from the DPP and had formed her own party. She went on to tell the Vice President that, “She should not speak on the Constitution because she is not supposed to”. Kaliati has since withdrawn the comments and claimed she was ordered to make the statements by senior cabinet colleagues. Peter Mutharika has backtracked too, and pledged his loyalty to the president.

Between Thursday night and Saturday lunchtime, there was feverish speculation about whether the DPP would ignore the constitution or try to use its majority in parliament to change it and prevent Banda taking over. In the end, perhaps lacking support from the police, army and judiciary, DPP leaders gave in. By early Saturday afternoon it was clear that the constitution and Banda had won. Rapid preparations were made for the inauguration. After her swearing-in, Joyce Banda spoke publicly and appealed for “all Malawians to remain calm and maintain peace during this mourning period”. She made her speech amid a show of constitutional unity with the Chief Secretary to the Cabinet and President, Bright Msaka, Inspector General of Police Peter Mukhito, the Army Commander Peter Odillo and Attorney General Maxson Mbendera standing behind her. Read more…

Fuel Shortage in Malawi

Wawa Malawi — Tue, 20 Dec 2011 14:53:22 +0000

Fuel shortage hits Malawi

Malawi Fuel Crisis

Malawi has been gripped by an acute fuel shortage that has paralyzed the operations of different sectors of the economy. This is evidenced by the scarcity of diesel, petrol and paraffin. This shortage of fuel has hit the country for over a month now. The problem started with diesel and has been extended to petrol. Observations on Sunday, 6th December, 2009, showed that some filling stations in Lilongwe had diesel but most of them had no petrol as petrol minibuses travelling from Lilongwe to Blantyre were just packed at Lilongwe Bus Deport.Â Apart from transportation, the problem has also affected operations of communication sectors, service sectors and even the healthy sector has not been spared. When there is blackout of electricity, Malawiâ€™s network providersâ€™ (Zain and TNM) transformers use fuel for operation of their system. Due to shortage of fuel some areas are experiencing communication problems when there is a blackout. The fuel shortage has forced some heavy industries to cut their production while motorists are opting to use public transport to and from work.

Why are we having this shortage?

The major reason why Malawi is having this fuel shortage problem is shortage of foreign exchange capital to buy fuel energy imported through neighbouring countries. But according to Petroleum Importers Limited (PIL) the fuel shortage problem on the market has come due to logistical problems, inadequate foreign currency and limited stock holding capacity. Logistical problems has come due to congestion at Beira and loading depot since August this year as suppliers were not able to meet Malawiâ€™s daily loading requirements at Beira which resulted in fuel shortage in Malawi for the month of October. In Dar es Salaam the congestion situation has been that ships have been waiting at sea up to 21 days or more to supply storage tanks at Malawi Cargo Centre. On the issue of foreign currency the market was affected by the shortage of foreign which forced the Nacala suppliers to suspend credit facilities at the end of October.

What government is doing to improve this shortage?

The Government of Malawi through the Ministry of Energy and Mines, two weeks ago assured the Malawi country that the situation would normalize by Monday (30th November) but up to now the Fuel crisis situation is not improving as expected. In an effort to combat this fuel crisis the Malawi Government through Malawi Energy Regulatory Authority (MERA), directed fuel service stations to ration fuel to clients to so that there is optimumÂ distribution of the commodity. In terms of buying, Government has allocated some funds for both spot buying of fuel as well to increase the amount of fuel available on the market.

Any impacts on the market!

The economy has already started suffering as some companies have stopped production. The Tea Industry has closed Satemwa because they could not operate with their diesel generators.

In the Textiles and clothing Industry , our own weaver and spinning company, MAPETOâ€™s Dyehouse section has been at zero operation. No new design /colours can be sent onto the market. They use almost 5,000 litres of diesel a day. Due to reduced trips they are losing on average cash sales valued at MK 15 million and MK 150 million from their shops and distributors respectively per week.They are unable to export goods to Zimbabwe (a) no new designs due to no production. (b) no vehicle to take the cloth to that country.

In the transport sector, trucks have spent more than 2 weeks without trips to transport goods. Passenger transport has also been heavily affected as Bus companies have either reduced trips or manage the crisis at the cost of getting fuel where it is available. Siku transport grounded more than 150 vehicles yet they are supposed to deliver fertilizer which has a deadline this early December. Similar sentiments have been said by our Shippers and forwarders, like MANICA whose major impact seen is that their long haul fleet is on average losing between 8-12 days per month waiting for fuel.

In the agriculture sectors, companies that ought to deliver seeds and other agriculture inputs cannot deliver far areas. This may have an impact on the food security which is one of the major area of focus by government.

In the telecommunications sector, Telecom Networks Malawi is doing about 10% to 20% less to the normal distribution trips and there is Intermittent network supply in areas with sites powered by diesel.

A new unlicensed business has emerged as Diesel is being traded at more than MK250 per litre.

Companies are likely going to incur increased labour costs as workers will receive un earned income for working less hours than normal. In other words labour productivity will drastically be reduced. Working hours are not being followed.

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