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HRDC SAYS MALAWI IS IN ECONOMIC CRISIS, DRIFTING TOWARDS A FAILED STATE

BY HRDC

20 August 2023:

Dear fellow citizens of Malawi,

We find ourselves as a nation in the midst of a severe economic crisis. This crisis has been precipitated by the government’s failure to make tough but necessary decisions that would address the needs of the Malawian people. To navigate this crisis, President Lazarus Chakwera must act swiftly and decisively without delay. The time to act is now, as failing to do so will lead Malawi down the path of becoming a failed state—a state unable to fulfill its fundamental constitutional duty of providing essential services to its citizens.  

At the heart of this crisis lies the government’s inability to effectively manage the economy, resulting in an enduring and uncontrollable shortage of foreign exchange. This shortage is the root cause of the chronic fuel supply disruptions that have driven up the cost of living, particularly food prices, leaving Malawians struggling to make ends meet. President Chakwera’s administration has further exacerbated this by its indecisiveness in handling maize prices and an alarmingly historic public debt of K7.9 trillion.

 We, as advocates of human rights, are gravely concerned by how the government’s economic mismanagement has infringed upon the rights of Malawians, including the rights to economic activity, food, good health, and life itself.  Even more disconcerting is the lack of a coherent policy from President Chakwera’s government to address this crisis. This absence of direction has eroded confidence in their ability to manage the situation, pushing us closer to the precipice of a failed state.  Escalating Cost of Living Inflation has soared to alarming levels, with rates around 29% as of August, placing Malawi among the highest inflation rates on the continent. This has resulted in exorbitant prices for essential goods and services, while wages remain stagnant. Remarkably, the government seems unfazed by this crisis. The cost of basic necessities like food, water, cooking oil, fuel, and transportation has skyrocketed, placing a heavy burden on the majority of the population. Urgent intervention is required to alleviate this hardship.

Fertilizer Procurement Fiasco

The mishandling of the fertilizer procurement crisis underscores the government’s lack of competence in managing crucial national matters. The maize and fertilizer subsidy issues are matters of utmost importance, affecting millions of Malawians and their livelihoods. The mishandled K750 million fertilizer deal reeked of fraud and incompetence, yet no one has been held accountable for it. Despite the previous blunders, the government entered into another ill-conceived fertilizer procurement deal with Romanian firm East Bridge Estate, further showcasing its negligence in public procurement procedures.

While we acknowledge the government’s efforts to rectify the situation, such as canceling the Romanian deal and attempt to recover funds from the K750 million deal, we denounce the lack of transparency and accountability in these transactions.

 Imminent Food Crisis

The government’s abrupt closure of ADMARC without a robust price regulation strategy has triggered an avoidable food crisis. Soaring maize prices have driven inflation and adversely affected commodity costs. The absence of ADMARC, meant to regulate prices, has allowed unscrupulous traders to exploit the situation, pricing basic goods out of reach for ordinary Malawians.The biggest crisis is that, in the absence of ADMARC markets, there is no access to maize, making it impossible for farmers in remote areas to purchase maize. The Southern Region has been heavily hit, with communities on the verge of hunger. The government must take responsibility for this crisis and implement swift measures to ensure food security.

Fuel and Forex Challenges

The government’s mishandling of the fuel and forex crises demonstrates a profound inability to address enduring issues. These crises are driving businesses to the brink of collapse, further deteriorating our nation’s economic prospects. The government must curb illegal export of produce to stabilize forex reserves and take decisive action to secure adequate fuel supplies. Misleading promises and a lack of transparency surrounding fuel solutions underscore the government’s inadequacies. President Chakwera must tackle these problems head-on, leveraging past promising ideas for solutions.

Escalating Debt Crisis

Our mounting national debt of K7.9 trillion is unsustainable and necessitates prudent resource management. Thoughtless borrowing burdens future generations, compelling us to commit to responsible resource stewardship and a legacy of which we can be proud.

Treading Towards Failure

In light of these alarming indicators, Malawi stands at the edge of becoming a failed state. As previously emphasized, a failed state is one where leadership glaringly fails in its Constitutional obligation to provide fundamental services to its citizens. Presently, President Chakwera’s leadership is unswervingly guiding Malawi towards this disheartening state of affairs.

Our Call: Activate Crisis Mode

HRDC officials during the presser

We maintain our conviction that President Chakwera’s current lookwarm approach cannot address the pressing crisis. We are indeed in a crisis, and the President must activate the crisis button, steering the nation through these tumultuous times.

We demand the following actions from the President:

•        Remain in office and suspend all international and local travel.

•        Dismiss underperforming Ministers, SPC, Presidential advisors, principal secretaries, and directors who have failed in their duty to manage the economy.

•        Present sustainable and actionable solutions to the fuel crisis.

•        Ensure professional and transparent procurement, management, and timely distribution of fertilizer for the AIP program.

•        Provide a clear actionable short, medium, and long-term crisis plan outlining the path to economic recovery.

•        Should the President fail to demonstrate commitment to these demands, we will be left with no choice but to mobilize Malawians through legitimate means to halt the violation of their constitutional rights by the government.

In Conclusion

Let us reflect on the hope that accompanied this government’s ascent to power. Regrettably, this administration’s shortcomings contradict the trust placed in them by the people of Malawi. The government must acknowledge the crisis at hand, depart from business as usual, and earnestly work to address these issues. Failing this, the prospect of early elections becomes a necessary consideration.

Signed,

Gift Trapence | National Chairperson  

Michael Kaiyatsa – Vice Chairperson | Beatrice Mateyo –  Member | Madalitso Banda – (Regional Chair – Eastern Region) | Masauko Thawe – (Regional Chair – Southern Region) | Moir Walita – (Regional Chair – Northern Region)

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