Chakwera pledges to commercialise agriculture

Bwana Chakwera, producing fertilizer in Malawi has been researched on many times before. It is not economic to produce fertilizer in Malawi because you will still import all the raw materials and Malawi does not have adequate power for fertilizer production. There are companies that are blending fertilizer in Malawi and that also does not bring the price of fertilizer down. Don’t be naive bwana. Kawelengeni SADC and COMESA documents they will give you a clue as to how we can reduce fertilizer prices. What you should strive for is rural market development so that the small holder farmers get equitable prices on their inefficiently produced and marketed commodities.

It’s a good starting point! Malawi can’t do alone, we need strong cooperation and commitment of SADC, COMESA, to make it happen. However, azungu us, Australia, UK akudyera momo. You should have some divine intervention to overrun these interests.

All successive Malawian politicians have been given truthful economic advice to think that agriculture is what will transform Malawi. In 1700, all countries in the world were agricultural. Their economies were struggling just like Malawi is doing now. It is virtually impossible to kick-start rapid economic growth with agriculture. One reason is that prices of agri products are lower compared to manufactured goods. The second is that over time prices of agricultural goods do not rise much. For example, in 1980 Malawi burley tobacco was $1.45 a kg and in2000 it was down to $1.15 a kg and to day it is around $2. Prices for Cars, steel or other industrial products double every 10 years. The third reason is that without industrialisation, production is very inefficient. Lastly agriculture does not create jobs in the cities for Malawi talented young professionals hence large youth unemployment. Having analysed economic issues on Malawi, I now realise that the country has been misguided to go in the wrong direction by powerful external forces on several matters that are not right for this nation. The policy of emphasising agriculture is one of the issues that has “hoodwinked” the whole nation as an economic strategy. It may seem right on the surface but just ask yourselves, if agriculture was the secrete then why has Malawi/Africa not developed in the past 1,000,000 years? Does it not occur to you that there must be something else that you are not doing to stimulate wealth creation, other than agriculture? Other nations are guarding this secrete to success for competitive advantage reasons but I will help you with all the details of what you need to create a national success.
Let me explain. There are two overarching economic development goals for Malawi 1) job creation /employment and 2) economic growth for national wealth creation. Both of these are driven by investment. What will Malawi look like when it is developed? No need to guess look around developed countries, agriculture will be less than 10% of GDP, manufacturing will be around 30% of GDP and services will constitute 60%. Most Malawians will have moved into urban areas to work in well paying jobs; paying on the low end around K6m pa. Few people will remain in farming but because they will be using fully mechanised farming (tractors, combined harvesters, fertilisers, insecticides etc) agricultural output will be 10 times more than what it is today. There will be no more mud houses. Primary and secondary education will be free for all with meals provided at school. Abject poverty and hunger will be things of the past. Yes every district in Malawi will look like Johannesburg. Malawi production structure will incorporate engineered materials (metals, ceramics, glass, plastics, chemicals) made in Malawi. To any classically untrained eye, this may seem like an impossible pipe dream in the sky for Malawi. I can assure you 100% that it is reality.
Politicians in Malawi must be encouraged not to choose winners and losers in industrial sectors. Govt ought to create an atmosphere so people can invest and prosper. Unfortunately, manufacturing is not well understood as a concept and as such many politicians resort to what they know, that is agriculture. I have reviewed the various policy details of the Malawi national growth strategy, MGDS II, CABS, and have listened to various party policies; all I can see is status quo. At his rate, Malawi has another 100 years in abject poverty. The journey must start now on the road to real development. Malawi can develop just like any other nation on earth. I do not believe that Malawi is “allergic” to technology, wealth, or prosperity. It is not true that Malawians are only good at farming. Malawi needs to unleash the human potential of its talented people who are not lazy but they have not been shown the way forward and have not been given the right tools to do their jobs.
I actually agree with some of the points that have been raised in this speech by the MCP president. Yes, Malawi must indeed produce local fertilisers to save on import costs and to encourage agriculture as a way of earning for villagers. However, Malawi, as a whole, must focus on a much broader economic growth program. That requires an integrated development strategy to balance conflicting goals. Otherwise, unforeseen issues such as what many commentators have raised on this discussion forum i.e high energy costs can be in the way. Nitrogen, in fertilisers, may be 98% of the air we breathe but the process to extract it needs natural gas to be combined with the air in a Habor Bosch process. The process has been around for hundreds of years however, it is very energy intensive, as someone has pointed out. That is not to say it cannot be done, coal can be used. Nothing is impossible for a determined Malawi! That brings up the issue of energy policy in this country. The most efficient and cheapest source of energy known to man is nuclear fission and Malawi is endowed with nuclear fuel of uranium. Enrich uranium 308 to 5% uranium 235 and split the 235 atoms with neutrons to generate high industrial grade energy that can meet any fertiliser energy demands.
Another example of policy area is lack of finance or expensive borrowing holding back many farmers from expanding production. According to Tobacco Association of Malawi (TAMA), the highest cost component of growing tobacco in Malawi is bank interests at 34% of the total cost; followed by labour wages at 16% and fertiliser at 14%. By Pareto analysis, this clearly shows that monetary policy in Malawi needs reform. That brings up monetary policy to be tackled to support investment in agriculture and industry in general as part of an integrated development strategy. I am aware that financial institutions will say we follow our models (such as value at risk, VaR ,models, say). National development must come first. RBM interest rate of 25% does not compare well with the Bank of England’s 0.5% interest rate. Malawi must stop feeling sorry for itself and join the world in being competitive. Archaic banking procedures and policies cannot support economic growth. Finally, is the issue of industrial policy. If the objective is to combat poverty, then mass employment with a decent minimum wage must be pursued vigorously as part of an integrated development strategy industrial policy. Without this integrated development strategy, nothing can work. As donors have just been made aware of, solving one problem with a narrow view in one area creates a bigger problem in another. Malawi needs a holistic approach to development driven by Malawians, not donors. The country just needs ambitious leaders who believe Malawi can compete at the highest level in the world. There is no limit to what Malawians can achieve! These ideas will put Malawi at the cusp of a breakthrough in real development.