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MINISTRY OF FINANCE
BY OWINGS CHAWANDA
The Ministry of Finance is the heartbeat of Malawi’s economy. It works like the human heart, pumping blood (allocating financial resources) to various line ministries in accordance with Parliamentary votes.
The ministry has also caught up with the drift of democracy rather quickly, and now runs budget consultative meetings in all three administrative regions of Malawi. This happens before the country’s new fiscal year, which starts on July 1, and aims at turning Malawi’s national budgets into all-inclusive programmes of action- turning the wishes and hopes of people into purposeful action.
So far, since the re-advent of multiparty democracy in 1994, so good. There has never been a single complaint about late disbursement of locally generated funds (through the Malawi Revenue Authority), though the country’s donors sometimes miss out on their own deadlines.
When this happens, the justification is always that they were waiting for the go-ahead from the International Monetary Fund (IMF). This has had dire consequences in the past. The Ministry of Finance has done a commendable job trying to balance things up during such finically lean periods, making sure that such delays do not impinge on overall national development.
Currently, the ministry is headed by Ken Kandodo, grandson to Ngwazi Dr. Hastings Kamuzu Banda- father and founder of the Malawi nation. Kandodo took over from former World Bank economist Goodall Gondwe.
Gondwe will best be remembered for instilling fiscal prudence at a time overspending would have easily turned out to be a political tramp card for the Democratic Progressive Party (DPP). They say people form political parties to go into government; the DPP beat this logic by being formed by people already in government.
Such a development attracted some quick fire response from the opposition United Democratic Front (UDF) and Malawi Congress Party- parties that pushed all corners to frustrate government’s development agenda.
This was confounded by the fact that DPP only had six MPs, as those who joined it after February 5, 2005 (the day incumbent president, Bingu wa Mutharika, announced his resignation from the UDF.
Yet, during this time of political turbulence, government did not overspend to make up for its lack of numbers in Parliament. Fiscal prudence became, sort of, its buzz word.
Kandodo, appointed Minister after the May 19, 2009 Parliamentary and Presidential elections, seems to be a quick learner. Contrary to fears of laxity and inefficiency at the purse-ministry, Kandodo has worn the garment of financial colours quite well.
Apart from being government gate keeper on finances, the ministry also carries out various other roles through statutory corporations under its arm pit.
One parastatal that comes quickly to mind is the National Lotteries Board (NLB), an institution mandated with the responsibility of regulating companies and organisations promotions and competitions.
NLB generates its income through license fees, which are then remitted to the Ministry of Finance. The statutory corporation also follows up on unfulfilled competition/promotional conditions, making sure consumers get their just rewards.
The Ministry also carries an oversight role over the Malawi Social Action Fund (Masaf), a rural development fund. Through the programme, primary and secondary schools, bridges, boreholes, among others, have been constructed in areas that once lagged behind.
In this regard, the Ministry’s Public Relations Officer (they call him/her Consultant) also doubles as Masaf spokesperson.
Many people have argued that the Malawi Gaming Board should have been under the same ministry, but government pundits feel the Ministry of Tourism is the best place because gaming complements tourism in income generation. There were, however, plans to place the Board under the Ministry of Finance during the UDF regime- nothing has materialized to date. In fact, the plans seem to have drowned under the winds of national elections.
That is pure politics. Never implement your competitors’ plans, change the names and do your thing. And that has happened. At whose expense is a question that needs to be critically looked into.
As for the institutions Minister of Finance can influence, here are some. Masaf, which means guaranteed contracts in bore hole drinking, school and hospital construction, as well as feeder roads construction.
In National Lotteries Board, the minister can influence tax holidays for institutions that carry out social promotional activities. After all, the ministry is responsible for offering tax rebates and holidays.
The Malawi Revenue Authority is another institution under the ministry. MRA collects local revenue through custom duty remittances, surtax, among others, and also extends tax rebates in consultation with the ministry of finance. This will help investors secure tax holidays on heavy equipment imports, as this type of equipment stand to benefit the country in many ways- employment creation, cheap goods/products, increased production and thus improved Balance of Payment.
In all, the ministry influences all other ministries, as they all look up to the ministry for sustenance. It is such a crucial ministry that its ministers are considered some of the most powerful under government protocol on hierarchy.

MINISTRY OF LABOUR
The Ministry handles employment matters pertaining to both private and public institutions.
It is responsible for setting Minimum Wages, fighting against malpractices such as child employment, workers ill-treatment but also acts as an arbitrator when conflicts arise between employers and employees.
The ministry also acts as an employment agency. Through its district offices, Labour officials receive requests for workers from various institutions, and then sources the much-required labour force. Most of the workers found through District and Regional Labour offices are unskilled, general fitters looking for some way out of financial problems.
These are people who bear the brunt of poor minimum wage statutes because companies pay them in exactitude of the same, or slightly higher- often, not higher enough wages to off set poverty. Employers cite the law, and the workers have no real chances of securing better employment elsewhere so they stay.
It must be noted that sourcing these unskilled workers is no big task. Why? Because these people flock to Labour offices and deliver letters of employment just in case some employers would like to hire them. But others think waiting and hoping solves no matters, so they go and sit outside Labour offices day in, day out.
It works most of the times, as desperate employers go to such offices and find readily available labour, workers they will easily handle by following laws on minimum wage to the latter.
That is one of the reasons Malawi is renowned for its abundance in cheap, readily available labour. And the workers are hard working.
In the past, when Malawians could work in South Africa under the TEBA initiative, the Ministry of Labour played a crucial role as well. Officials could work with their Foreign Affairs counterparts to make sure the right people went to work in South African mines. The programme was beneficial to many people because they could work in foreign lands in remit part of their income back home. The country’s economy benefited, too.
However, the down side was that many Malawians married and became South African citizens. The country lost some human resource in a way, but benefited even more through remittances of money back home. But only for those who cared to remember relatives back home.
The Ministry of Labour has recently come into the spotlight. This is partly because of new Minister Yunus Mussa. Mussa accepts no apologies where action would remedy a situation, and also bears some impatience with laws that are refusing to change with the times.
Some of these laws include provisions on Minimum Wage. Under the Employment Act, people are paid less than K139 per hour, a figure Mussa takes for the pittance it is. He has thus been moving up and down town, touring companies- mostly private- and plucking a few feathers here and there.
He has threatened to close others. Take, for instance, Shoprite Malawi. Some four months ago, all its Lilongwe (Capital City of Malawi) workers went on strike demanding a salary increase. They were not happy with what they were getting.
Instead of following proper channels, like discussing amicably with officials, the workers closed the Lilongwe shop and refused to work. Shoprite makes a lot of money, K25 million a day on average (one of the reasons workers cited for their demand). The strike meant loss of money.
The company’s headquarters in South Africa then decided to fire all the workers for that, but Mussa was there at hand and negotiated with the headquarters to reinstate the workers. He said Shoprite would stop operating in Malawi if it went ahead with the decision to fire the employees. The company obliged.
But Mussa also took issues with the workers for not following proper channels. But he won, anyway, and that shows how powerful a Labour Minister is in Malawi. This does not go for government institutions alone, even the private sector as the Lilongwe case indicates.
The ministry works with the Civil Service Trade Union (the representative body for civil servants) and the Malawi Congress of Trade Unions, the mother body for private workers. Every year, in June, the two unions hold closed meeting with Ministry of Labour officials and discuss challenges facing workers and proposals to improve their conditions.
However, there is bad blood between MCTU and government, so much so that President Bingu wa Mutharika and his predecessor Bakili Muluzi have never attended Labour Day Cerebrations. MCTU President Luther Mambala has openly criticized Mutharika, saying government seems not to care about the plight of Malawian workers.
This has meant most of MCTU concerns go unheeded.
MCTU has also accused the ministry of labour of conniving with foreign investors to reap Malawians through the Minimum Wage, which it claims is a pittance.
The Ministry of Labour also works with the Immigration Department on issues of foreign investors. They scrutinize applications, though the task also false under a host of other government departments. These include the Malawi Investment Promotion Agency (MIPA) and the Malawi Export Promotion Council.
The Ministry also works with the Malawi Confederation of Chambers of Commerce and Industry since it is a representative body of private employers. Then, there is the Employers Consultative Association of Malawi. Every year, the ministry, labour unions and the Employers association meet to discuss crucial issues, issues that seldom see light at the end of the day.
The only issue that seemed to have worked is the issue of Severance Pay. It was a long battle but, in the end, trade unions won.
As for institutions Mussa can influence, we have many. MIPA, MCCCI (where the likes of Shoprite belong), Civil Servants Trade Union, and individual institutions. The minister is allowed to discuss individual challenges and solutions with companies, and investors can utilize this window.
That is why Chinese companies, mostly accused of exploiting workers, are getting a smooth ride. The Chinese government’s close relationship with Malawi has opened opportunities for Chinese nationals to negotiate for better conditions and amicable resolution of labour matters.
The Ministry is expected to play a huge role as Malawi plans to turn into a net exporter.