Business Unpacked

Bye 2013, where do we go from here?

This is my last entry of Business Unpacked in 2013 as today is the last Thursday of this year.

Before I proceed further, may I wish you all my dear readers a Merry Christmas (a belated one though) and a Happy New Year 2014 that the good Lord will usher us into at midnight on December 31 2013.

I thank all readers for the support given to my column in the year through your constructive criticism, input and all. I do not take such gestures for granted. May God bless you abundantly and give you more wisdom as we continue with the “unpacking” journey in future.

It is difficult to describe the year 2013 in terms of business. However, suffice to say that it was a mixed bag. There were some gains made which, unfortunately were quickly eroded by some developments such as the Capital Hill financial scandal, widely known as the cashgate, which exposed free-for-all plunder of public resources by some greedy public servants and their cronies.

In its Malawi Business Climate Survey (MBCS) for 2013, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) said, in a nutshell, business was good in the passing year. The survey, based on responses from companies, found that 58 out of every 100 said “business was good” compared to 25 percent in 2012.

In general terms, though, the catalyst to a good business environment, notably utilities such as water and electricity supply remained erratic. There was poor service delivery from the water boards and the Electricity Supply Corporation of Malawi (Escom), sad developments that continued to force businesses and individuals to invest in non-core ventures such as water storage tanks and stand-by power generators, thereby pushing up the cost of doing business.

Ironically, Escom raised its tariffs by almost 84 percent between May 2012 and August this year on the promise that the corporation wanted to invest in its network to improve service delivery. To date, however, the country still dreams of having power all day, everyday.

During the year, we saw the kwacha, which was devalued by 49 percent in May 2012 and subsequently floated, gaining strength against its major trading currencies, including the dollar. The gains were attributed to good prices offered for the green gold, tobacco which accounts for about 60 percent of the country’s foreign exchange earnings. There were also inflows from the country’s development partners.

However, in a twist of events, the kwacha succumbed to seasonal factors as it started losing value soon after the close of the tobacco marketing season, despite the import cover—the ratio of foreign exchange that can enable a country import goods and services—being closer to the internationally minimum recommended three months.

To rub salt into the wound, donors under the Common Approach to Budget Support (Cabs) on November 7 2013 announced the suspension of their budget support for the second quarter (October to December) of the 2013/14 fiscal year.

With some level of seriousness among our leaders, such a freeze should not be a big deal as donors contribute 40 percent to our national budget whereas we put in 60 percent and, at the same time, “steal” close to 30 percent of the resources allocated in the budget. But in a country where corruption is rife, this aid freeze has a huge impact.

Just this week, the International Monetary Fund (IMF) ranked Malawi’s economy as the second worst in the work in 2013. This was embarrassing, but, in my view, not surprising. We have an economy that seems to be on auto-pilot with too many experiments using human beings as specimen.

We are going into an election year when our voter registration certificates will enable us, through the ballot, “employ” a President and 193 Members of Parliament (MPs) to run the affairs of our country. It is my prayer that we vote wisely and employ leaders with vision to transform our country. Ndikale tinayamba kulira aMalawi… (We have cried for too long for a better Malawi). Tomorrow has come (THC), to quote my good friend lawyer John-Gift Mwakhwawa.

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