Malawi's Economy Swings from Boom to Doom

Over six years after Malawi registered the second fastest world economic growth rate, the economy seems to be gaining ground on its free-fall from boom to doom.

According to the World Bank’s January 2016 issue of Global Economic Prospects (GEP), the country does not even appear among the top six countries set to become Africa’s fastest growing economies this year.

The report is titled ‘Global Economic Prospects January 2016: Spillovers amid Weak Growth’.Leading the park of the fastest growing economies on the continent is Ethiopia. The World Bank projects that Ethiopia could register a Gross Domestic Product (GDP) of 10.50 percent in 2016, up from 9.50 percent last year. Second on the list is the Democratic Republic of Congo, which is expected to register a GDP of 8.50 percent this year. 

The Ivory Coast, with a projected economic growth of 7.70 percent, Mozambique [7.30 percent], Tanzania [7.10 percent], and Rwanda [7.00 percent] are the other countries billed to register significant GDP growth in 2016.

The development comes barely six years after the Economist Intelligence Unit indicated the country’s economy was the second-fastest growing economy in the world, second only to oil-rich Qatar. This did not come as a surprise as the country registered consecutive bumper harvests in the 2005/06, and 2006/07 growing seasons.

"Malawi has had two good years of bumper maize harvest and is in

surplus of about 1,1 million tonnes," Nasinuku Saukila, general

manager of the National Food Reserve Agency told international media in April 2007. 

 

Saukila made the remarks when Malawi was preparing to export 400 000 tonnes of the staple to the then cash-strapped Zimbabwe.
However, diplomatic spats, including with Malawi’s former colonial master, Britain, meant the country was walking a dangerous export path as fuel and sugar became scarce commodities in one of the worst economic disasters to befall the nation. The situation continued until April 2012, when former president the late Bingu wa Mutharika died and his vice, Joyce Banda, took oath of office on April 7, 2012.
Among other recovery measures, Banda introduced a National Economic Recovery Plan.

“Within months of assuming office, I instituted an economic recovery programme to restore macroeconomic stability and lay the foundations for long-term growth. The economic recovery plan includes a combination of measures designed to stabilise our economy [such as the devaluation of the kwacha, the loosening of foreign-exchange controls and strong fiscal discipline], as well as social-protection programmes designed to cushion the poorest in our society from some of the unintended negative consequences of the austerity programme,” Banda told The European Times in 2012.

 The plan supported projects in the agriculture, mining, energy, tourism and infrastructure sectors.

 Banda’s ascension was followed by the January 2013 visit by International Monetary Fund (IMF) Managing Director, Christine Lagarde, who hailed the economic recovery plans.

Half-way to safety

“During my discussions with Malawi’s leaders, I congratulated President Joyce Banda on the bold economic policies of her administration, including the liberalisation of the foreign-exchange market. I welcome the President’s efforts to address unforeseen challenges through her continued commitment to economic reforms.

“Malawi has already made significant progress in addressing the serious imbalances that were hampering economic growth just a few months ago. Malawi must stay on course, while putting in place social-protection programs to alleviate the impact of the adjustment measures on the poorest households,” said Lagarde, adding: “Malawi is half across the river, and the other bank is within reach.”

 

The Reserve Bank of Malawi (RBM), in its first Monetary Policy statement for 2016 released on Thursday, indicated that it “…intends to maintain a tight monetary policy stance in the coming months while ensuring sufficient foreign exchange reserves to support private sector activities”.

 The central bank is, mainly, counting on prospects for improved crop production in the 2015/16 growing season, hinting that it is targeting a 19.3 percent decline in inflation.
 Finance Minister, Goodall Gondwe, said on January 5 that the government is confident it is on track to meet conditions that would attract budgetary support from the World Bank and the European Union totalling up to K50 billion.
 Gondwe has also projected economic stability by May.
 “We are about to complete [sic] some of the conditions,” Gondwe told the media. “For the past three months, we have almost stopped domestic borrowing,” said Gondwe.
 He added that, while the country’s economy is projected to grow by 3 percent this year, a good harvest could spur it towards a five percent economic growth.

Lost path

However, apart from the institutional bodies such as the World Bank and IMF, Gondwe is not so sure about the comeback of bilateral donors, observing that bilateral donors have deserted not only Malawi but other countries as well.

This position was first announced by President Peter Mutharika’s address during the opening of the 46^th Session of Parliament on November 6, 2015.

“For years, we have relied on budgetary aid while dependency mentality deepened and our poverty rose. Now, there is no more budgetary support. The age of donor aid seems to be gone. Our developing partners remain with us only with support outside the budget,” said Mutharika.

According to economic expert, Henry Kachaje, the kwacha’s value continues to fall, “considering that inflation averaged 24 percent in 2015 and that the kwacha devalued by almost 42 percent”.

The Reserve Bank of Malawi (RBM’s) has indicated in its first Monetary Policy statement for 2016 that inflation is forecast to decline to 19.3 percent with a better crop in the 2015/16 growing season. However, the central bank’s rate is higher than the government’s target of 14.2 percent.

Despite RBM’s optimism for a good crop, preliminary results indicate that the country’s green gold, tobacco, may not do well this year.

Tobacco Association of Malawi president, Reuben Maigwa, has cited poor rains as the main challenge.

“Most farmers have planted the crop but, due to low rainfall, there is compromised production. We may not produce sufficient crop and the crop may be marred by poor quality,” said Maigwa in an interview.

The development comes at a time when prospects for tobacco are becoming less promising. Earnings from tobacco dropped by 8 percent last year from $366.3 million (about K205 billion) earned in 2014 to $337.3 million (about K189 billion).

Challenges

According to the 2015 World Bank Assessment on the ease of doing business, the business environment is one of the factors negatively impacting on economic performance.

The assessors put Malawi on position 141 out of 189 countries on ease of doing business. However, the 2015 ranking was a marked improvement from position 164 the previous year. It was the first time in three years for Malawi to register a positive movement on the index.

However, Industry and Trade Minister, Joseph Mwanamvekha, has revealed that Mutharika has directed the ministry to get the country into the top 100 by 2017.

“As a Ministry, we believe it is doable and we are going to achieve that,” said Mwanamvekha.

Some of the steps he identified as signs of government’s commitment include the review and enactment of the Insolvency Act, the Companies Act and the Credit Reference Bureau Act in line with on-going government reforms.

Despite the reforms, however, business captains have bemoaned the country’s “punitive” tax regime, with Indigenous Business Association of Malawi president, Mike Mulombwa, bemoaning the operating environment in 2015.

“The revenue collectors have a narrow tax base and are squeezing money out of the already burdened taxpayers. Secondly, we have the problem of high interest rates, mainly because there are no cut off points for interest in Malawi. In other countries, lenders stop collecting interest on loans once a borrower has paid back half of what they borrowed,” said Mlombwa.

MRA Commissioner General, Tom Malata, told The Business Times of January 6, 2016 that “the Malawi Revenue Authority is expected to collect K597 billion in the 2015/16 fiscal year based on the 2015/16 national budget estimates”.

Malata further indicated that MRA collected K233.6 billion against the target of K247 billion between July and November 2015. This represents 95 percent of the targeted collections.

MRA missed its target for the first quarter of 2015 as it collected K193.58 between July and October 2015. The tax collector also missed its October target by 5 percent as it only collected K53. 03 billion against the target of K55.97 billion.

Mutharika hinted in November that revenue under-collecting was one of the factors fuelling government’s appetite for borrowing.

“Mr. Speaker Sir, it is important to reiterate that the over-expenditure was largely due to revenue under-collection, low grant inflows during the 2014/15 financial year…. It must be remembered that government has committed obligations we cannot escape even in hard times,” said Mutharika.

According to the January GEP issue, the global economy has been misfiring.

Among other things, it observes that global growth slowed to 2.4 percent last year, and is expected to recover at a slower pace than previously envisioned, as growth is projected to reach 2.9 percent in 2016, thanks to a modest recovery in advanced economies.

As Mutharika warned during the opening of the 46^th Session of Parliament, “More than ever, we need economic prudence and innovation. Malawians must understand the changing times we live in. We must work and endure our painful path to economic sovereignty. And we must do what it takes to end the suffering of our people.”

However, People’s Party spokesperson on finance and economic issues, Ralph Jooma, observed that the greatest challenge facing Malawi is over-projection of figures, citing the 2014/15 K930 billion budget as a case in point.

 

Jooma said a realistic budget would have hovered around K800 billion. He said this means exaggeration exacerbates the trend where the country misses out on most of its financial targets.

 Business and economic experts have also raised doubts over the country’s ability to shake off 2015 economic challenges.

Malawi Confederation of Chambers of Commerce and Industry president, Newton Kambala, told The Daily Times of January 5 that this year’s economic prospects could be less promising.

 “Obviously, the bad side of this [uncontrolled public finance expenditure] is that businesses will remain uncompetitive and eventually slow down the economic activities. All economic variables have signalled a failing economy with rising inflation, high interest rates, fluctuating foreign exchange rates,” Kambala was quoted as saying.

 On his part, Economics Association of Malawi executive director, Edward Chilima, was quoted as saying, “If nothing happens, the growth would be very low this year, way below projected figures. We don’t see any changes in the agriculture sector; we are still inefficient and we cannot see a very good crop this year”.

Did The Neno Elders Deserve To Die?

Like a stranger, 86-year-old Eliza Kanjete was the first to be cornered— according to one of the Neno police officers who rushed to the scene of four murdered elderly citizens on Monday.

Branded a ‘witch’ on account of her striking old age, she was not the only one earmarked to die, though.

One by one, 76-year-old Elenafa Kanjete, 73-year-old Byson Kanjete and 69-year-old Idesi Kanjete— not necessarily in that order, but all from one family— were chased around their houses by a bloodthirsty mob in a remote corner of Neno.

Too old to run, they were always going to get exhausted earlier than usual, their energy running out, and their legs failing them. Terrified, they must have slumped in the dust, whimpered and pleaded for mercy, before being overrun by the anger, and physical force of Group Village Head Chimbalanga’s subjects in Traditional Authority Dambe, Neno.

“The four died due to severe beatings, according to post-mortem results. We, as police, are sure that we will have a clear picture of what happened, and decide on the next course of action,” said Neno Police spokesperson, Raphael Kaliati, on Thursday.

Granted, death happens. It is an act of nature.

However, when death is forced— like in the Neno case— nobody understands it; not even Cabinet ministers under whose armpit such issues fall.

“Of course, each and every person will die. The Neno elderly people were also going to die some day. But not in this manner. Not on Monday, as it were. The manner of their death is shocking. It shows that the villagers who have done this do not have respect for human life,” said Gender, Children, Women and Social Welfare Minister, Patricia Kaliati, on Thursday.

Everyone is shocked, GVH Chimbalanga inclusive.

“As a leader, I am really shocked with the death of these people because it has never happened in the history of this village. Not even once have we ever had a man killed in this village,” The Daily Times of January 27 quotes Chimbalanga as saying during the funeral ceremony.

Maybe Neno Shelter for the Aged executive director, Reen Kachere, may understand the issue better than others— having served as Neno legislator and Minister responsible for the Elderly and People with Disabilities as recently as three years ago.

“I, too, cannot understand this. In fact, I am ashamed. This is yet another sad chapter in the history of Neno and we need to understand why what has happened has happened, and what we must do to arrest the problem. In fact, we visited the village where the deceased came from on Friday and we have agreed with the community members to establish village committees in order to address such issues before they turn into brutal anger,” Kachere said in an interview. 

Even the Malawi Law Society (MLS), whose members are known to save a life from the gallows through the technical movement of the tongue in court, is shocked. 

Neno Four

So shocked is MLS with the Neno events that, within days, the Kanjetes— hitherto unknown— have become known as the Neno 4.

MLS describes the heinous murder of the Kanjetes as a ‘barbaric’ act.

“The senseless and heinous murders of the Neno 4 is a despicable outrage that the Society condemns without any reservation whatsoever. Such kind of barbaric acts stain our collective conscience and have got absolutely no place in a civilised society.

“They should accordingly be fervently opposed and denounced by all right-thinking Malawians. It is even more saddening to note that it would appear that the Neno 4 were principally targeted because of their old age. It reflects extremely poorly on those who were involved in these murders that instead of protecting these vulnerable people, they turned on them and murdered them,” MLS, in a scathing January 27 statement issued by president John Suzi Banda and Honorary Secretary Khumbo Bonzoe Soko, said.

However, as the nation grapples with shock, MLS also found some time to pick threads of sanity in the confusion. It does so by appealing to reason.

“The Society would like to remind all Malawians that our country is a nation of laws. It is the duty of each and every citizen to observe and uphold these laws. We implore our fellow citizens to report all instances of suspected law breaking to the Malawi Police Service and other government law enforcement agencies for appropriate action to be taken. No severity of our indignation at the sight of illegal behaviour will ever justify the taking of the law into our own hands,” it added. 

Remote voice
Embarrassingly, though, leaders of some Civil Society Organisations who never took time off their “busy schedules” to see the four Kanjetes on their last journey have joined the train of condemners.
The Kanjetes went in simple coffins draped in zitenje [pieces of cloth] in what could remotely be described as a ‘decent’ burial.
Still, failure to attend their funerals and show solidarity did not stop media-hungry CSOs from issuing condemnatory statements, apparently to get credit out of all the darkness that has befallen Neno and the country.

Leaders of nine CSOs, one human rights lawyer and human rights activist, condemned the Neno incident in a statement released on Wednesday, calling on the government to invest in mass sensitisation exercises in a bid to enlighten the country’s citizens.

The statement, titled ‘Civil Society Statement on the Brutal Killings of Four Elderly People and Escaping Prisoner', was signed by Timothy Mtambo of the Centre for Human Rights and Rehabilitation, Masauko Thawe of Young Advocates, George Thindwa of Association for Secular Humanism, Gift Trapence of Centre for the Development of People, Robert Mkwezalamba of the Human Rights Consultative Committee.

Others were Victor Mhango of Centre for Human Rights Education Advice and Assistance, Mtende Msindama of Lawyers for Human Rights, Charles Kajoloweka of Youth and Society, Darlingtion Harawa of Passion for Women and Children, human rights activist Billy Mayaya and human rights lawyer Chrispine Sibande.

Said the signatories in the statement: “We categorically and unequivocally condemn these barbaric killings and call upon the law enforcers to accord the utmost urgency [sic] the issue deserves so that those responsible whoever they are and wherever they are  should be hunted down, arrested and  be held accountable for this crime that gravely violate [sic] human dignity and human rights,” reads part of the statement.

The CSOs argue that the Malawi Witchcraft Act forbids any trial by ordeal.

Added the CSOs: “In fact, both the Constitution of Malawi and the Penal Code criminalises it. In reference to witchcraft accusations and mob justice against the accused, the Malawi Witchcraft Act – which is part of codified criminal law with prosecutions brought under the Witchcraft Act falling under the jurisdiction of the Magistrate Court— forbids any trial by ordeal that involves “poison, fire, boiling water, or any ordeal which is likely to directly or indirectly result in death or bodily injury to any person”. The Act further forbids accusing anyone of being a witch or practicing witchcraft.”

The United Nations Committee on the Elimination of Discrimination Against Women recognises witchcraft accusations and brutal killings of the accused as a form of violence against women and has urged many states including Malawi to take action against witchcraft accusations by challenging the “traditional view” about elderly women being witches through investigating torture and killing of suspected witches and prosecute the perpetrators.

In addition, the United Nations Special Rapporteur on Extrajudicial or arbitrary executions, in a 2009 report, called upon states to ensure that all killings of alleged witches are treated as murder, and should be investigated, prosecuted and punished accordingly.

“It is, therefore, clear from this that immunity from prosecution of mob violence against anyone including those accused of witchcraft has no place under both  domestic and international legal jurisdiction hence our candid reminder to law enforcers to move with urgency on the matter,” reads the statement in part.

While both MLS and the nine CSOs are quick to point at instruments, both local and international, anthropologists observe that the law does not always hold its course.

For example, the 2010 issue of ‘Anthropologist’ Journal [Volume 12 issue Number 4] observes that: “Public opinion dictates public ideas of causation. The logic of quasi-traditional reactions to distress and anxiety are little affected by the narrow limits of Western scientific pragmatism.”

In anything, a recent spike in the killing of elderly people— as the Neno case testifies— is a good point in point.

Leap forward

When anger spills over, it finally recedes and it is time the nation looked forward to stemming witchcraft-based violence cases.

MLS suggests that those culpable of the Neno murders should face the long arm of the law. It is payback time and nothing less.

“The Society hopes that the Malawi Police Service will relentlessly pursue those who were responsible for the murder of the Neno 4 so that they can account for their actions in a competent court of law. Should these cases be successfully investigated and the wrongdoers apprehended, the Society offers to the government of Malawi the services of its members for their prosecution, on a pro bono basis,” says MLS in its statement.

The nine CSO leaders and two human rights activists agree, but add another dimension to nipping such acts in the bud.

Reads a part of their statement: “We also implore government through the Ministry of Justice and Constitutional Affairs, Ministry of Information, and Ministry of Gender, Children and Social Welfare in partnership with Malawi Human Rights Commission to come out and strongly condemn this barbaric act. Besides, its high time government through these Ministries seriously considered embarking on a robust sensitization campaign of the ills of mob violence as it is apparent that there is also limited or lack of understanding of the rights of the accused persons and also the criminality of the act.

“We further call on Malawi Police Service and Ministry of Local Government and internal security to intensify and invest resources on Community policing and awareness raising on the role of the Police and the need for people to coexist but more importantly treat the Police as their first call on any issue of this nature. As CSOs we believe if our police is taken to the people directly or through Community policing structures, such incidents can be avoided as there will always be tips and grapevines of serious actions to take place in a community which If dealt with in time can prevent such incidents. We strongly believe that this will go a long way in eliminating the incidences of mob justice in the country.”

For Kachere, however, the establishment of committees in each district is the way to go.

“These committees should accommodate the elderly and those who accuse the elderly of being witches. That way, we will tackle these cases and stop people from committing these heinous crimes,” says Kachere.

For Kaliati, however, social cash transfers to the elderly and other vulnerable people may help empower the elderly economically, and stop them from relying too much on relatives who may wish to get rid of the social burden by accusing the elderly of practicing witchcraft. Fortunately, the government, under the dynamic leadership of Prof Peter Mutharika, is already doing that,” says Kaliati.

As the bodies of Eliza Kanjete, Elenafa Kanjete, Byson Kanjete and Idesi Kanjete lie peacefully, but dead anyway, it is clear that the dust will take long to settle down. 

The cost of People’s Party’s selective politics

It is becoming clear that losing the May 2014 tripartite elections is the hardest thing the former ruling People’s Party (PP) has had to grapple with in its less than five years of existence.
Just in 2012, the New Vision of Uganda described PP leader Joyce Banda, who had just become Malawi’s first female president, courtesy of death, as “The woman with nine lives”. It told the story of how Banda had set out as a woman activist in the late 1980s, setting a gender equality crusade in a male-dominated society, and her way to State House, among other things.
But that was before Banda and her PP were to face a political litmus test two years later— the May 2014 tripartite elections.
One year seven months after being floored in the tripartite elections, Banda and her beloved PP do not only seem to have the nine lives stuffed out of them; they seem to be looking for a life outside the country, and outside the politics of elections, respectively.
On one hand, Banda is busy looking for a life away from the country she loves so much that she cannot do without while, on the other hand, the PP is looking for a life – within Malawi, of course— outside the politics of Local Government elections.
Otherwise, how do we explain the party’s conspicuous absence in, say, the December 23 Local Government bye-elections in Mtope Ward in Mchinji West Constituency and Ngala Ward in Lilongwe Msozi North Constituency? The PP only contested in the Parliamentary elections in Banda’s home-district of Zomba, where Asma Mponda represented the party’s aspirations.
The party’s spokesperson, Ken Msonda, made an appearance on Times Television’s Breakfast Live programme nine days before the bye-elections in Mchinji, Zomba and Lilongwe, and hinted that the PP would have nothing to do with the bye-elections and, therefore, Malawians. According to Msonda, elections in Malawi are not worth it anymore because “The Malawi Electoral Commission (Mec) selects people” instead of administering the elections and letting the winner be.
The PP participation in the Parliamentary election in Zomba was, therefore, somehow soothing, but not comforting because the party still shunned the Local Government bye-elections in Mchinji and Lilongwe.
Whatever the case, the Mec went ahead with the Local Government bye-elections without the PP and, from the results— voter apathy and gender imbalances aside— democracy is at work. Among other not-so-surprising results, the Malawi Congress Party (MCP) did the expected by winning the Mtope Ward bye-election. Its candidate, Auleriano Kalemba, floored the ruling Democratic Progressive Party’s candidate on the way to the District Council.
It was a similar story in Ngala Ward, where MCP’s Master Rodgers Chazama bought his way to the Lilongwe District Council at the expense of DPP’s Regina Sululu.
Again, as expected, the DPP showed that the MCP is still has a long way to catching up with it in the Eastern Region as its Parliamentary candidate, Mark Michael Botomani, beat five other candidates –Stephen Alexious Chikwapula, independent; Dyson R. Chimwala, independent; Asma W. Mponda, PP; Brazio Namakhuwa, MCP; and Felistas Mpando Sumani, independent— on his way to Parliament.
In all fairness, we do not expect the PP to win each and every election, but its decision to select which battles to fight in, and which ones to shun may not give it a fair view of its political clout.
But its absence in the Local Government bye-elections may be a replica of what is happening at the top level of the party: Physical absence is creating a yawning gap that may make it difficult for party members to catch up with their top leadership while, at the same time, the party is making it difficult for itself in terms of catching up with the electorate in elections like this week’s bye-elections.

FALSE ALLEGATION - NO ONE DIED OF HUNGER!

PRESS RELEASE

For Immediate Release

FALSE ALLEGATION - NO ONE DIED OF HUNGER!

The article in the Daily times of January 13, 2016, titled “Man Dies of Hunger” is false and cannot stand medical scrutiny. The article states that a post-mortem was conducted on the body of an unknown hunger victim in the bush in Mzimba, after which the body was buried on the spot. The article further claims that the post-mortem established that the man died of starvation. It is alleged in the same article that “post-mortem results indicated that the man died of hunger related causes.”

No medical professional can conduct a post-mortem exam in the bush and establish the cause of death, especially if the finding is meant to be used in Police investigations. In medical forensic enquiry, “starvation” can never be signed on a medical document as cause of death. In cases of starvation, it is specific complications of severe food deprivation or aggravated pre-existing illnesses that cause death. It is these specific causes and their relation to hunger that are stated on a medical document as cause of death. In this article, although hunger-related causes were mentioned as a cause of death earlier in the article, no specific cause was stated as would normally be the case.

In any case, Police authorities in Mzimba have stated that there was no post-mortem done in the bush where the dead body was found. They know that this deceased person is a non-Malawian because of the head features which they could recognize on the dead body. They suspect that he is a refugee who fell sick and was abandoned by fellow refugees as they passed through bushes at night to avoid detection by Malawi authorities.

Most shocking to us was that when we finally asked the medical person who visited the site, she told us that she found the body to be essentially bones. She could barely recognize some head features, and had the impression that the person had been dead for a long time. She told everybody on site that the cause of death was unknown. She was therefore surprised to hear a newspaper report that a post-mortem established the cause of death to be starvation.

The Police and general public in the area know that Ethiopians, Somalis, Sudanese and others use these routes in their frequent attempts to cross Malawi borders illegally. All this information must have been given to the Daily Times news reporter, but for reasons which everyone can now guess, he never reflected these facts in his report.

In this same article, the newspaper alleges that “the Police have advised the public in the district to avoid walking long distances when they have not eaten anything in the wake of looming hunger in most parts of the country.” The Police have again denied that they gave this warning.

It is obvious that this news reporter had ill intentions in this article. He started by discrediting the State President's policy that nobody shall die of hunger in Malawi. He then went on to lie that a post-mortem established starvation to be the cause of death and further lied about the Police issuing a warning.

This is irresponsible journalism at its highest. It is unpatriotic and most dishonest. We would like all journalists in this country to safeguard the professional integrity of journalism. Such crude fabrications are harmful not just to Government but much more to the country and worse still to the profession itself. We urge the journalists through their professional body to investigate this event and take appropriate disciplinary action.

HON. JAPPIE MHANGO, MP

GOVERNMENT SPOKESPERSON AND MINISTER OF INFORMATION, TOURISM AND CIVIC EDUCATION

15TH JANUARY, 2016.