Bingu’s death no end to fuel crisis

On January 1 2012, Malawians entered a third year of queuing for fuel at dry service station. This was probably a head of a protracted fuel crisis that nearly brought the country to a standstill and left it spiralling down the economic cliff Zimbabweans endured about five years ago.

“The city is littered with fuel queues like back home,” joked Zimbabwe’s controversial poet Chirikure Chirikure during his performance in Blantyre at the onset of the crisis in 2010.

Early this year, a Zimbabwean minister who toured the country wrote on Facebook that Malawi’s pathetic condition was the reason Zimbabweans felt the problematic unity government of Robert Mugabe and Morgan Tsvangirai was better than the economic mess that necessitated it.

But this was no laughing matter. An opinion was gaining sway that even rural populations were not spared the harsh bite of the crisis and some petitioned the late president Bingu wa Mutharika to solve the situation or step down.

Whereas the petition subtly presupposed that the fuel shortage would vanish with Mutharika, it was never to be. The former president died on April 5. He was replaced by his deputy Joyce Banda. He was buried after a city-to-city VIP funeral procession which was literally fuelled by petroleum donations from Zambia and South Africa.

However, Malawians cannot blame Mutharika forever. The reappearance of the fuel queues nationwide—especially in September, five months after Mutharika’s rule—calls for Banda to upgrade from handouts and short-term loans to sustainable solutions that looked impossible in the decried hard times.

The country has been plagued by erratic fuel supply largely due to lack of foreign currency at a time tobacco revenue, which contributes about 60 percent of the country’s forex reserves, had dipped by 30 percent.

This has proved a devastating blow to the highly importing, donor-dependent economy considering that Britain, International Monetary Fund (IMF), World Bank and other bilateral partners had frozen aid in protest to Mutharika’s repressive political and economic governance.

In January, Capital Hill loaned $100 million (about K17.7 billion at that time) from India to buy petroleum.

Today, the country’s oil industry is still banking on a $208 million (about K70 billion) package of local and international loans to buy fuel that can last five month, according to government. What happened to strategic planning?

Despite the bailout package, Minister of Finance Ken Lipenga told The Nation last month that the shortage will continue because the country’s major suppliers still do not have confidence in the economy.

The bleak forecast from Capital Hill evokes the uncertainty which engulfed the country in the latter days of Mutharika when he sneaked out to Nigeria and returned empty-handed through the cargo section at Kamuzu International Airport in Lilongwe.

Today, government cannot continue treating Malawians to the same old jazz. The common tune includes the National Oil Company of Malawi (Nacoma) $25 million construction of national fuel reserves and renovation of storage facilities which have been rusting due to disuse at Chilumba Port in Karonga, Chipoka in Salima and Mchinji on the Malawi-Zambia border.

However, the K8.4 billion reserves could be white elephants under construction, for who will build skyscraping tanks when they are grappling to provide enough to a person queuing for five litres at the pump.

Given this makes economic sense, the tragic approach to fuel storage and distribution is loud in the silence that has been lingering at Chipoka since 1997.

A meeting point of the country’s rail, water and road transport systems, the lakeshore town is decaying. The tanks are corroding. The railway is overgrown. The water transport is now only for the on-and-off MV Ilala and other ships for passengers and dry cargo.

“Chipoka was a vibrant town, but it is almost dead now. The place has been neglected since trains and trucks stopped coming to load fuel here,” said Mahamud Mbaya, a resident who has grown up in the vicinity of the decrepit port.

As the mess continues, talk is mounting—and action remains non-existent—on government’s plans to revamp the water and rail transport to save the country from the rising cost of road transport.

The Ministry of Finance said Malawi needs 1.124 million litres daily, translating to 33.6 million litres per month. Last year, the Ministry of Energy projected the monthly fuel import bill at about $30 million (about K5.7 billion, before government devalued the kwacha).

Nine months ago, the energy ministry hinted that government was searching for a comprehensive lasting solution to the fuel shortage which is crippling all sectors of the economy.

However, the then energy minister Goodall Gondwe, now Minister of Economic Planning and Development, could not give any sound strategy apart from “securing some funding for the purchase of fuel to last a week or two”.

As a quick fix, the borrow-and-buy strategy is failing to end sporadic supply of fuel and forex deficit. Maybe this is why the Finance Ministry flirted with the possibility of buying fuel using kwacha or tobacco—a first in the book of international trade.

While the likes of Consumer Association of Malawi (Cama) are considering demonstrating against the rise of basic goods as a result of skyrocketing fuel prices, the JB government should also ponder on comprehensive lasting solutions to its intermittent supply. Mutharika is gone; the new heads must get to work.