Malawi in African, world economies
Do those who are in charge of the Malawi economy learn any lessons from secular trends? Most policymakers are concerned with winning election every five years so much so that they do not put in place policies and measures of long time benefits.
One bird does not make a summer, it has been observed. High growth rates in a year or two do not mean a country has taken off in a manner depicted by the American economist W.W. Rostow in the early 1960s.
They are talking polices and some are still holding high profile office who went about the country supporting late Bingu wa Mutharika’s decision to change the design of the Malawi flag. This propaganda started after the country was told officially that Malawi had achieved the second highest growth rates in the world after Qatar. An assumption was made that Malawi had ceased to be one of the slowest growing poorest countries, and therefore, deserved a flag that reflected its new status. A year or two later there was an anti-climax in the growth and prosperity of the country.
These days we are being informed that Malawi has the most ample foreign exchange reserves since independence. Does this mean we can relax having sailed out of the stormy sea? Not if we learn from experience.
In the African Business of December 2016, there is an article by Neil Ford headed Is the Worst of Africa’s Downturn Really Over? The last paragraph reads: “Even if there is a full-scale recovery in commodity prices, it is to be hoped that the government of resource-rich countries have learnt their lesson although history suggest otherwise.”
The article observes that while Africa about 10 years or so ago, was the fastest growing continent, it is back to tail of the race. The African Development Bank (AfDB) believes Africa has past the era of economic downturn with 19 countries’ growth at three to five percent and 21 countries at over five percent. The International Monetary Fund (IMF) is less sanguine about Africa’s foreseeable economic prosperity.
Countries which were lodestars of others in the best days were those which had commodities which fast-growing China needed most. These countries were copper-rich Zambia, oil-producing and exporting Angola and Nigeria. These are now the worst hit as a result of China’s recession.
Countries which are doing well are Kenya, Tanzania, Côte d’Ivoire, Ethiopia and Senegal. Economies of those countries are diversified. The fall in commodity exports and prices has not affected them much. South Africa’s economy is stagnant and that of Nigeria is in its first recession for a quarter of a century. The malaise of these leading economies has impacted on the reset of African countries which do business with them.
Whenever I hear someone holding a key position in the government say that despite the anti-smoking lobby in the World Health Organisation (WHO), Malawi must continue growing its main export commodity tobacco I feel how myopic this fellow is. The declines in sales of tobacco that we have been experiencing in the past five or 10 years are portents of catastrophe the country is likely to experience if the efforts to diversify the economy are taken perfunctorily.
Whenever we say the diversification of the economy is everybody’s responsibility in the government and in the private sector, we must not forget the maxim which says that everybody’s responsibility is nobody’s responsibility. If the diversification programme is to take off from the ground, a specific organisation must be set up or nominated staffed with technocrats.
I have several times suggested reviving the Ministry of Economic Affairs which our first president set up in 1966. It did not last because he appointed to it a brilliant man called Aleke K. Banda. But at the age of 25, most of the older ministers became very resentful as they thought the Ngwazi was grooming the young man and namesake for succession. The revived Ministry of Economic Affairs should absorb the Department of Economic Planning and Development, which is currently overshadowed by the Ministry of Finance. The revised ministry should be headed by the Vice-President.
Lip service reforms will take us nowhere. Let us get better organised and double our efforts.n
