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Monday, May 7, 2012

Protect the Poor Madame President

Finally the evil we all pretended would never come has landed. The Malawi Kwacha for long held at an artificial rate has come crumbling down to an already worn out people. Malawians have moved from position of comfort to that of uncertainty in the past one also years.
The devaluation this morning, could not have been as painful as this one will be, if the kwacha was let to float and make its own value stand. Controls should only be done in economies which are stronger to sustain themselves.
Today, the dollar is at K252 officially and the countries largest Commercial bank is buying at K247 and selling hard cash at K257.
Good news to exporters- especially tobacco farmers. Their take home will increase considerably though we are not sure how the corresponding cost of living will  be at the moment. The cost of living is already high for an average worker in Malawi.
The administration of President Joyce Banda, as she personally say running to put things in order. She says Malawi needs at least K257,000,000 billion at today's exchange rate to recover from the economic mess we put ourselves in due to our arrogance.
I have not heard any announcement of money coming this week or tomorrow save for the USD35 million from South Africa and the Zambian donation of fuel.
I wish Government made all the commitments first to these financial institutions and signed a deal that when we do what we are supposed to do, the poor will not be affected by such decisions grossly.
Forty percent of Malawians live below a dollar a day, they do not make any money in foreign exchange.
Only 2 million Malawians out of the 14 million are in employment out of which only 300,000 really make meaningful wages to live according to the cost of living.
Cooking Oil Kazinga is selling at K1,200  a litre, today I expect it to hit somewhere around K1,700.
My income which I received almost two weeks ago and I could barely survive on it, has been devalued pegged to a dollar. I now have to wait for month end, get the same income but pay 50 percent higher for every item I am buying.
God save us.
Who are the Economic advisers of our President? Have they been announced or we are buying wholesale IMF programmes without looking at the need to cushion the needs of our own poor people?
There was an out cry over appointment of Dr. Ken Lipenga as Minister of Finance, many widely expected that he would move for a more economic oriented candidate. After all he is among the defendants of zero deficit budget, despite all the wailing of Malawians. Politics should be out of principle and not greed.
Today I will ask the question, we have devalued, what is it that is there for a poor man, a salaried Civil Servant whose next increment can only come on 1 July, 2012.
The minimum wage for the country remains pathetically very low, around USD20 per month when the Centre for Social Concern indicates that urban dwellers require at least USD200 dollars a month to make a comfortably, at least before devaluation.
There is potential for all the goodwill given to President Joyce Banda to evaporate if the cost of living went high up. President Bingu wa Mutharika might have died a very unpopular leader, but one of the biggest challenge he left to JB is that he had already brainwashed Malawians on the evils of devaluation.
Late Mutharika had his own amplifiers in the name of Chiefs, MBC and political stooges.
President Joyce Banda should not rush or be rushed to make decisions that have grave political consequences given the volatile economic situation that the country is facing.
I would have loved our traditional donors to come in quickly and organise  a special bail out like USD500 million as a stop gap measure for Malawi, while we are working to unlock the suspended USD500 million which would restore our economy.
Fuel lines are back in Lilongwe at least as of Saturday, goods are being hoarded and the  foreign exchange situation remains very fragile. The devaluation will only bring the cost of living high and there are no follow up announcements that are being made to mitigate its impact, not only to the rural poor, but to the working poor who support extended family systems.
The International community needs to respond as a matter of urgency to the gesture by the Joyce Banda Government, as any delays will create discontent and risks a volatile Malawi, where angry citizens do not want an administration that works with the donors but not listen to the cries of the poor.
Nicholas Sarkozy of France on Sunday became the 11th political leader to be claimed by the economic crisis. July 20 was mainly about the biting cost of living, unemployment and political and executive arrogance.
Let us have a two tier path to restore our economy as soon as it could be practical, but with President Joyce Banda protecting the poor.
The impact of this devaluation could be two fold, it could revive the economy if the donors come quickly but it could also damage President Joyce Banda's credentials as after a stubborn predecessor, she risks being seen as a pushover by the West, who unfortunately at times want to have own conditions than that really make sense to the common man.
Perhaps an emergency Parliament could have made sense and have an early budget. 
Otherwise, I equally expect an announcement concerning my pay...... at the same rate of devaluation.. why should I suffer...
God Bless Malawi

6 comments:

Laston said...

Zibwere chaka chino nzatonse.

Felixchisoni Express Views said...

Something is terribly wrong.Who are JB's advisers? Yah, professionals have argued but approach and timing seems to be a problem here.

Deborah Nyangulu-Chipofya said...

really you think donors can give you a bailout of $500 million when they are failing to bail out countries like Greece who are far more important on the world economy than malawi. This is half a billion dollars you are talking about here

Fryson Chodzi said...

Well written Ko.

Fryson Chodzi said...

Well written Ko.

Revs said...

The civil servants,the Ministers pay them selves too much. The president of India gets paid 2000 USD, Prime Minister gets paid 1900 USD a Month,
Supreme Court Judge gets paid 1800 Usd. Now compere them with Malawi.