Monday, March 28, 2016

Of The Malawi Economy's 'Resurrection' and Easter

A falling Malawi Kwacha increases Malawi's sense of isolation.
This sense of isolation increases when the Malawi Kwacha staggers when pitted against other, relatively strong, economies right here in Africa. For instance, the South African Rand, which at one point traded shoulder-to-shoulder with the Malawi Kwacha in the good, old days, is miles away from the Malawi Kwacha. One really needs bags of banknotes just get the Kwacha equivalent of 50, 000 Rand.
We cannot talk of the United States Dollar, for a long time the measure of the Malawi Kwacha's strength, or weakness. I do not know why the Sterling Pound does not count much in a country which used to be under British rule. In January this year, one United States dollar sold at 700-plus kwacha.
Thing is, the Malawi Kwacha annually staggers in the run up to the Easter Holidays [which this year spanned from March 25 to March 28]. It is normal for the Kwacha to behave this way. After all, by this time, the foreign currencies in our reserves are depleted-- this being long after the tobacco sales.
Again, the situation is understandable because, by this time, subsistence and smallholders farmers keeping on hoping for a good harvest [maize, rice, sorghum] because the real crop is still in the field. There is hope, yes-- because the maize, sorghum, rice crop for that particular year can be seen. But everything ends there; at the hope stage. Until the crops are harvested, we cannot say the crops are as good as harvested!
But, then, every year, the expected, but odd, development takes place. As Malawians-- who pride themselves in being a God-fearing people-- look forward to the Easter Holidays, they discover that the Kwacha has recovered somewhat, and that the economic situation is not as bad as it were a couple of months before.Come to think of it, the Malawi Kwacha is selling at 675 to one United States Dollar today, as opposed to the 700-plus figure one required to put their hand on a United States Dollar.
This is victory of some sort, and the experts say the kwacha behaves this way because the tobacco sales' season is on the cards. The trend has always been that the United States Dollars start trickling in ahead of the tobacco sales, thereby boosting the, otherwise, wobbling Malawi economy.
Ironically, according to economic commentator Henry Kachaje, the "Malawi Kwacha has been sick for decades".
So, it is not like the Malawi economy recovers in the run up to the Easter Holidays. It has never fully recovered "for decades" [to put Kachaje's observation in context].
But, at least, it gains something of its lost muscle, though the gains are just a fraction of what we may call success.
Back to the odd development that takes place annually. Why does the Malawi Kwacha's relative gain coincide with the Easter Holidays? Is it because Malawians are a God-fearing people?
Well, the truth is that the Malawi Kwacha recovers part of its lost clout due to a so-called evil: tobacco!
Tobacco kills. Tobacco makes people cough.
But the Malawi Kwacha does not die. The Malawi Kwacha does not cough.
NOW BUYING MORE: Malawi's banknotes -- Banknote pictures sourced from
It [instead] gets a lost part of itself [a part of a lost part of itself] back. And that time happens to coincide with the Easter Holidays [holidays celebrated because there was a resurrection-- Great Resurrection-- once]. And that time coincides with the onset of the tobacco sales season.
It is an odd fact that will keep on repeating itself. A fact that helps ease Malawi's [should we say the Malawi Kwacha's?] sense of isolation.

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