By Fryson Chonzi
Over 2000 years ago, a very popular preacher, a son of Man, commonly called Jesus had a triumphant entry into Jerusalem. Jesus told Pharisees that if you stop the people from singing, the stones will sing for him. Others might be like Pharisees, but the stones are ready to dance in Malawi, they already have enough reasons to dance, don’t stretch their patience further.
Finally President Rev. Dr. Lazurus McCathy Chakwera has spoken. The reason for fuel scarcity is not logistics, but shortage of FOREX. He has further said that $28M has been sourced from local banks to import 6 million litres of fuel. A further $50M is yet to be sourced.
Let me translate what this means.
- Malawi’s monthly (30 days) fuel consumption is estimated at 30 million litres. This means the imported 6 million litres the President talked about is enough for 6 days
- The pledged $50M will only be able to purchase additional fuel which will last not more than 11days. If $28M is buying 6 million litres therefore $50M would buy an estimate of 11 million litres.
- The money that President said he has sourced means actually the Government has borrowed. Yes this is domestic borrowing which is called currency swap at a higher rate. Now this pushes further the level of domestic debt which in the last 12 months hovers just over K1Trillion.
What’s the Verdict?
This is a temporary relief and Malawi must brace for tough times ahead. There is going to be more fuel scarcity in Malawi and it will be in unprecedented levels. This kind of purchases is like living hand to mouth. Brace yourself for more fuel scarcity.
The second is that this pushes further the inflation as the domestic borrowing will continue to pile pressure on the economy. Life is going to get worse.
What’s the solution?
Unless President Chakwera is going to suffer with us in this difficult moment, we will assume he doesn’t give a shit about us. It’s time for austerity measures starting with President Chakwera himself.
- Advise him that to show seriousness, let him cancel his UNGA trip scheduled for this weekend. He will save $1M which then the country will have to source $49M.
- President Chakwera must review his foreign policy and make a U-turn in most of his policies. He needs friends for neighbors. Some of the problem Malawi is facing can easily be cushioned in SADC but as long as Chakwera wants to adopt an antagonist approach to foreign policy against SADC and AU, Malawi will have no help.
Nobody in SADC is going to come to our aide like Zambia did in 2012 when Malawi is an enemy to their friend in the Russian – Ukraine conflict. The Jerusalem embassy plans must be publicly denounced and abandoned.
Now we are worried of forex for fuel and we are sourcing such, we also need forex for strategic commodities including fertilizer for AIP and drugs. At this point Chakwera must admit that his Governor and financial advisors lied to him on the line of credit that Malawi had with Afrexim bank and ATDB.
Joyce Banda established these line of credit to ensure Malawi had enough forex and on going facility for strategic commodities. The APM administration built on these line of credit and expanded them. The Chakwera administration came to denounce them as money laundering and fraud. This is the result of what we are experiencing.
The DPP negotiated an IMF programme in 2018, the MCP unceremoniously cancelled the ECF in 2020 saying its aiding money laundering and financial crimes, and these are the harvest we are yielding now.
President Chakwera needs to review his internal financial team and truth be told, the current Governor at the RBM is way past his usefulness. The financial advisors need to change and the Finance Minister presently cannot instill confidence into the economy. There is need for change and drastic change.
President Chakwera can continue to holding on to this team until the stones start dancing and one day he will work up surprised and confused asking himself how it has gotten to the extent that the stones have unceremoniously removed him from the seat of power.
This might be in 2025, but maybe even earlier. After all the power to govern only exist on a sustained trust of the people of Malawi as per the constitution.
