Rising prices jolt govt into action
Rising commodity prices on the local market have pushed the Competition and Fair Trading Commission (CFTC) to stop nine companies from raising prices, but experts have cautioned the move could create market distortions.
On Tuesday, CFTC issued interim orders to nine farm input distribution companies and two poultry feed manufacturers ordering them to cease and desist from engaging in excessive pricing and unconscionable conduct.

The farm input companies include Export Trading Group (ETG), Farmers World, Malawi Fertiliser Company, Dalitso General Supplies, Paramount Holdings Limited, Optichem (2000) Limited, Rab Processors Limited, Brussels Fertilisers Limited and Agora Limited.
On the other hand, the poultry feed companies ordered to stop raising prices include CP Feeds and Proto Feeds.
CFTC executive director Lloyds Nkhoma in a statement the action is in line with Section 23 of the Competition and Fair Trading Act.
He said: “The Act gives powers to the commission to issue an interim order requesting an enterprise to stop engaging in conduct where the commission, before it reaches a final decision on a matter, believes, on reasonable grounds, that an enterprise has engaged, is engaging, or is proposing to engage, in conduct that constitutes or may constitute an infringement of the Act.”
Helema said the order is issued where it is necessary for the commission to act as a matter of urgency to prevent serious, irreparable damage to any person or category of persons; or protecting the public interest.
In an interview on Tuesday, CFTC spokesperson Innocent Helema said if businesses do not abide by the order, they will be subjectes to criminal proceedings under the Act.
However, the National Working Group on Trade Policy chairperson Frederick Changaya said in an interview that price controls are a sign of failed economic management, arguing that pricing trends are a reflection of a run away inflation worsened by foreign exchange shortage.
He warned that price controls could lead businesses into losses since the government is not controlling the cost of running the business, especially forex.
Said Changaya: “You cannot control the output side of the business while leaving the input side liberalised. That would be unfair.
“People don’t know the exchange rate tomorrow. Today you buy a dollar at K3 250, tomorrow you buy it at K3 500. Even if you don’t buy dollars, next day since they aren’t readily available, economic players do hedging.”
Changaya, a former Reserve Bank of Malawi (RBM) Monetary Policy Committee member, said the solutions lie in crafting responsive monetary and fiscal policies.
On his part, Scotland-based Malawian economist Velli Nyirongo observed that the frequent price adjustments in Malawi are largely driven by economic challenges such as currency depreciation, high inflation and rising operational costs.
He said: “Price control regulations might provide temporary relief to consumers and prevent exploitative pricing. On the other hand, they risk creating market distortions, discouraging business profitability, and leading to shortages or declines in product quality.”
Nyirongo said a more sustainable approach to addressing these issues would involve strengthening the kwacha through export diversification, reducing import dependence and attracting foreign investment,” he said.
However, Consumers Association of Malawi executive director John Kapito observed that the scarcity of forex and the continued depreciation of the kwacha do not allow traders to have fixed prices as the selling prices keep on changing every day.-
He said if prices were to be controlled, it could force traders to stop importing, thereby creating supply challenges on the market.
“We need forex for prices to be stable,” he said.
Recently, faith-based economic think-tank, Centre for Social Concern (CfSC) urged the government to address price volatility, which it said was compounding the cost of living crisis, hovering at over K578 843 per month.
The 2023 Finscope Consumer Survey found that while half of adults set spending goals or budgets, 59 percent frequently end up spending more than they intended, pointing to the challenges posed by a tough economy and rising commodity prices.
According to the survey, when income is insufficient to cover expenses until the next earning period, 80 percent of individuals run out of money before their next pay period, managing finances can be challenging, even for those who have the self-control to implement financial planning and budgeting.