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Fri05242013

Last update04:07:55 PM

Back Daily Times Headlines Features 'Too many spectators won't solve Malawi's problems'

'Too many spectators won't solve Malawi's problems'

Late last month, I was previledged to be among 12 journalists from across Africa who met in Arusha, Tanzania for a poverty reporting training programme organised by the International Fund for Agriculture Development (Ifad).

The training coincided with the September 26 to 28 Africa Green Revolution Forum (AGRF).

As I sipped a bottle of kilimanjaro beer at Impalla Hotel after a tiresome 12 hour trip to tour ginger farmers Mamba Myaba, a village situated 90 km from Same and about 180 km from a Tanzanian town of Moshi, a Tanzanian economist came and sat next to me.

He greeted me and I introduced myself as a journalist from Malawi. The barman gave him a glass of hakuna matata.

Sitting at the bar, we discussed a number of issues, starting with the Lake Malawi/Lake Nyasa disagreement to politics and economics in the two countries.

One thing that touched me most in our discussion was his comment about the economic problems that Malawi is currently facing.

He indicated that Malawians are to blame for the forex and fuel problems that the country is facing because most of them are just mere spectators in the 'generating forex game'.

"Malawians have themselves to blame for this problem. You people have too many spectators in this forex generation game. Many of you need forex to buy necessities and luxuries but very few of you are generating that forex.

"You said you live in Blantyre? Just look around the city, how many people are doing something to help generate forex? You will find that it is a handful. Then look around again, how many people need forex? You will find that plenty of people want forex.

"So you need to ask yourselves as Malawians where you are going to get the enormous amount of forex you need. You need to start using your heads than blaming the authorities. Otherwise you will keep singing the same song of forex shortages forever," said the economist before he retired to bed.

Chancellor College Economics Professor Ban Kaluwa agrees that Malawi has too many spectators and very few generating forex.

"They prefer to be spectators and gamblers because although they know the game, they can't play it," said Kaluwa.

To reverse the situation, Kaluwa says first, all the pro-business and pro-exports (anti-imports) foreign exchange rate policy framework will help but that players need to be able to access credit at affordable cost for investment and operations of export producing activities.

Economics Association of Malawi (Ecama) Executive Director Nelson Mkandawire says the the observations by the Tanzanian economist have some elements of truth.

"You send forex out of the country if you import and continue to import which is actually the case with our country. To create forex you need to become a producing and manufacturing country.

"By so doing you become an exporter - your products are demanded outside your country and obviously they will buy in dollars. In the process forex reserves accumulate in a country.

"When you look across the country very few people are in the export market. Whatever a larger population does or produces is largely for home consumption," said Mkandawire.

He argues that, though agriculture is the mainstay the economy at the moment, unfortunately Malawians dwelt much on growing tobacco which is dwindling at a fast pace on the world market today.

"What we need to do to earn more forex and have more Malawians participating in forex generation is to encourage diversified approach to agriculture. Government needs to isolate key crops (soya, tea, groundnuts, maize, beans, mpendazuwa, peas, et cetera) and identify markets out there and encourage farmers to produce those crops for export purposes. Malawi will earn more.

"There is also need to revisit the monetary policies especially the bank lending rates. This will allow Malawians to access funds from banks for them to do business. We appreciate the move by Standard Bank in the area of SMEs as they have recently come up with a package to allow such businesses to thrive on borrowed money without collateral.

" But the challenge remains to be the repayments due to high interest rates which discourages more participation from Malawians," said Mkandawire.

He adds that as a country Malawi also needs to quickly enact the National Export Strategy (NES) which was drafted recently.

"There are a lot of trade imbalances at the moment in the country due to a weak national export strategy. It is my hope that the Ministry of Industry and Trade will speed up the process of ensuring that the draft NES is enacted," said Mkandawire.

 

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