The stagnation paradox

The Norwegian diplomat went into fray and it got me to think of how far business unusual has been integrated into our psyche or way of doing things. There is a lot to talk about. Opportunities gained, missed and likewise fortunes of different magnitudes. Dreams and hopes achieved or messed over the last half a century. We have had non-stop political campaigns since 1994. Malawians have stuck to their peace despite few episodes. Peace has prevailed and that is the cardinal belief of this column if businesses are to strive, workers fell safe.

Is there anything unusual that one has to do? The president promised business unusual in his approach and I am tempted to think we should all embrace his philosophy. No matter how you view him, but I like to think that APM is a different person. That makes it business unusual? I don’t know but my recollection of this approach is that it filters through to all that deal with government in many ways. The president does not run a business as such. Come to think of any business person. What unusual do they do? The reality of poor customer service is a norm. State House cannot solve it.

I can add a few lines to a story that is too common whenever the kwacha loses some kudos. Business captains are usually leading the furore to think that government is not doing enough to save the currency or provide an enabling environment. There is some merit but one needs to minimise the economics of the tongue. It is a usual business. I brand it that way. But most of them are not looking forward to venture into export market but bid for that government contract.

Capital Hill does not own any farm and factory. The few businesses it owns include the mighty Electricity Supply Corporation of Malawi (Escom), water boards, airspace, roads and the rest are public institutions that serve the nation at zero cost. This does not bring any foreign exchange. Capital Hill sold many assets through privatisation to entrepreneurs who for a variety of reasons still reckon business is getting government contracts. This does not bring you any foreign exchange, and therefore, relinquishes any right to blame it, including the Reserve Bank of Malawi (RBM) for any loss in the value of the kwacha.

The business of government is not exporting goods and services, even though there might be some little revenue out of such operations. If anything, Capital Hill has made attempts to get our private sector to export through numerous trade agreements. Some few years ago we had free trade agreements with South Africa on condition that we export local materials but it appears some clever businesses opted to break the rules of origin and we lost it. The Africa Growth and Opportunity Act (Agoa) never lived to its expectation because local companies failed to meet orders. You don’t ship one container of textiles and expect to compete with ruthless Bangladesh or Vietnam. But could we blame the Malawi government for this? Not all. They don’t own any textile company.

These are just some examples of many that sometimes lead us to blame everything on government. As we start 2015, I reckon it is time that the Malawian private sector raises their game and think outside the box. It should be business unusual and be willing to venture into external markets by taking more risk and expanding their production.

The export market can be tough but requires good quality products and large volumes. Our players must raise their game. While the cost of capital is high, there are many alternatives to raise capital. The Malawi Stock Exchange (MSE) has had no listing for some years, but remains a cheaper source to raise capital in the wake of prohibitive interest rates. But guess what? The stock market comes with commitment to transparency in doing business, good corporate governance practices that our private sector is very much apprehensive about. This is where an element of doing business unusual should be embraced into our way of life.

So, let us not always blame the government whenever foreign exchange is limited in the bank. Water boards don’t generate foreign exchange, and sadly, we have left everything in the hands of tobacco farmers that cultivate their fields using wooden hoes to bring the much-needed greenbacks.

This does not exonerate government since providing an enabling business environment is core capital hill business. The Norwegian ambassador could also have been referring to issues such as security, supply of electricity and water, good roads and efficient delivery of services that support businesses. Our country is still fraught with exchange controls, often giving incentives to beat the system.

In the end, like on many occasions, this column argues how we change our psyche in the way we do things will be key to change the poorest tag.  It looks like a paradox of stagnation given the peace that this country has enjoyed for decades. n