May 2022 never come back
Today is the end of 2022. Being the last day of the year the temptation was high to wind up the year by looking back at the highs and lows the nation has been through the past 365 days. Bear with me, briefly.
Economically, 2022 has been a tough year. It is the year the kwacha was devalued by 25 percent. This was done to shore up dwindling foreign exchange reserves and curb inflation. The devaluation announced by the Reserve Bank of Malawi on May 27 2022 was the biggest in a decade. The last devaluation of the kwacha (33 percent) took place in 2012.
The bad news about the devaluation is that it came on the back of the 12.1 percent inflation (as of April), triggered by a rise in food and non-food prices. Inflation is now at 25.8 percent and counting. Needless to say, that the devaluation and runaway inflation have dwindled people’s incomes and sky-rocked prices of all commodities including cooking oil, fuel and fertilizer, to mention just a few.
The decommissioning of Aggreko gensets in April was a misdemeamour. Aggreko was adding 78 megawatts to the national grid. The decommissioning was particularly wrong as it was done at a time Kapichira Hydo-Power station, which supplies 129 megawatts or a third of the power in the national grid, had been taken out following the damages by cyclones Ana and Gombe. Government should first have found an alternative source of power despite the fact that running Aggreko gensets was expensive. After all, there was already a tariff for this. By the way, Malawi Energy Regulatory Authority has not removed the tariff eight months after the decommissioning. This is ripping off consumers who are no longer receiving the services for which the tariff was introduced.
I hardly need to mention that the severe load shedding that is underway due to insufficient power generation is mostly negatively impacting small and medium enterprises which are located away from industrial areas which are prioritised on power supply.
Earlier in the year, government announced that K6.2 billion Covid 19 funds had been embezzled. But despite the tough talk by President Lazarus Chakwera, not a single has been prosecuted so far over the loss of the money.
In October it transpired that when the Malawi government wanted to procure fertiliser for the Affordable Inputs Programme, it paid a UK butcher K750 million as a down payment for a K30 billion contract for the commodity. A whole ministry wanting to buy fertiliser from a slaughter house? Government is now spending more money to recover the K750 million. How much more is government spending through such sleazy deals we don’t know of?
Then we had the fuel shortages that rocked the country between October and November, the worst fuel shortage after that in 2012. Such things should never come back in 2023.
Was the arrest of Vice President Saulos Chilima by the Anti Corruption Bureau (ACB) in November a high or a low? Maybe both or none. Chilima was arrested for allegedly receiving $280 000 and other unnamed items from UK based businessman Zuneth Sattar. Suffice to say it was a first for government to arrest its second in command.
If Chilima’s arrest was a border line case, ACB director general Martha Chizuma’s incarceration by police on December 6 was one of the biggest lows in the fight against corruption in the country. She was arrested following a complaint from the Director of Public Prosecutions Steven Kayuni that the ACB director injured him in her leaked clip in January this year. The State has dropped the charges against her and President Chakwera who reaffirmed his commitment to stand with Chizuma suspended Kayuni. But the event sent tongues wagging as to who is in control.
Of course it has not been all doom and gloom. One event that could put a smile on some faces of Malawians is the launch of the rehabilitation works of the 347 kilometres of the M1 road at a tune of over K200 billion. President Lazarus Chakwera launched the project in July to be financed through the European Investment Bank. The objective of the road is to improve food security, access to trade and essential service through provision of basic road infrastructure by providing a reliable and durable M1 road integrated into the Comesa North South corridor. Most contractors have started mobilization on their projects but real construction work is yet to start as the companies are waiting for the final outcomes of the environmental and social impact reports.
Government could also count on its efforts for reaching the Staff Level Agreement with the International Monetary Fund. Through the facility Malawi is receiving up to $88.3 million (K94 billion). The financing will help Malawi address its urgent balance of payment needs related to the global food crisis. The ultimate objective is to get the Extended Credit Facility. But overall, we are still very much in the woods, much more so following the chaotic implementation of the AIP which does not give much hope for 2023. I wish you all a prosperous 2023.
