Tembo and the economy

What exactly would a Tembo government bring to the Malawi economy? Given his political record, Tembo is careful not to touch on his political record which is a sordid and bloody one. Instead he claims he has economic policy experience and cites his years as the Reserve Bank Governor as evidence of his competence.

 

But how did Tembo perform? Our research team here in the Hole has quickly looked at the figures. Tembo was governor of the central bank of Malawi between 1971-1984. Quite a number of things happened during this period. First, Tembo tribalised the staffing of the Reserve Bank – a legacy that still afflicts the Reserve Bank to this day.

Second the economy did not perform well during this period. It is not clear what indicators Tembo is using to judge his performance. If we take the indicators usually used to evaluate central banks Tembo does not come out as such a shining performer that we can be persuaded to overlook his bloody political past (Okay he is a killer but he is a good economist) . When Tembo took over the Reserve Bank Malawi’s foreign exchange reserves were enough to cover 3 months of imports. By the time he left this had fallen to less than two months. The share of investment in GDP fell from 24 percent in 1972 to 12 percent in 1984. Between 1965 and 1971 the economy grew at the average annual rate of rate of 7.2 and while Tembo was governor of the central bank the rate fell to 4.0. Indeed much of the decline that was to result in two decades of stagnation started precisely during the period when he was at the Reserve Bank. As for the Kwacha the parallel market exchange of the dollar to the Kwacha was 1.40 Kwacha’s per dollar in  1.40 in 1978 and the Kwacha fell to  2.2 kwachas per dollar. By entertaining every whim of Dr. Banda the Reserve Bank contributed to the deep crisis that produced two decades of economic decline. All this may not be entirely his fault but he has no right to claim the right to rule Malawi on the basis of his performance at the reserve bank.

Tembo¨s performnace may look good in light of the disastrous Muluzi performance but it cannot be used to argue that he would be a better castodian of the Malawi economy than the Bingu-Gondwe team. 

 

 

Hold on to your mining rights

If you have any mining rights anywhere in Malawi hold on to them!  You could be sitting on a fortune. No one seems to know exactly what they are prospecting for. You may recall that the Australian company Global Uranium was prospecting for uranium when it hit on “world class” reserves of not uranium but even more significantly niobium and tantalum. The company was so overwhelmed by its discovery that it changed its name to Global Metals. Now an Italian company Block & Rock Italia from Carrara (Tuscany), which specializes in granite is wrestling with a Malawi partner and trying to take over the company Ilomba Granite Co. Ltd (Malawi). Reason? It turns out that the granite contains niobium! This is in Karonga, by the way.

 

Vote Wisely

As we approach the elections, the Malawi political scene is taking on a surreal character. First, we have the most unlikely alliance woven around  one fundamental objective – to replace Bingu. The gang  of characters adhering to the coalition is unlikely to be an orderly one and, even worse,  is unlikely to provide the country stable government for the next five years. Just imagine for once a “unity government” consisting of the cunning, tribalist, and blood-stained (see Tom Likambale) Tembo the the politically promiscous  and political clown  Chakuamba, the unpredictable and, as Tom Likambale decribed him,  “thoroughly pathetic” Brown Mpinganjira and the irredeemably kleptocratic, incompent  and power-hungry Muluzi. Blood-letting and skullduggery among them will swiftly  follow  the swearing in ceremony of this the most unlikely political mishmash ever concocted this side of heaven.  The ensuing political instability will definitely jeopardize the significant political and economic gains the country has made during the last 15 years in the case of the former and during the last 5 years in the case of the latter.

And then they are the  "Manifestos". Given that the common denominator for the “Gang of Four”   is simply the quest for power, there is no unifying ideological platform on which they stand and consequently no common vision for the country. And not surprisingly, what we now hear from the opposition corner are desperate and shrill noises instead of coherent statements of their position. The opposition  parties have wished the President dead, displayed willful quest for martyrdom (“Bingu wants to kill me”), played the tribalist card, called for vengeance when in office etc.

Now, we Malawians have all too often  put to test  Our Maker’s goodwill and mercy towards us and all too often  have let ourselves be led to the brink of disaster. It is time that we stop playing Russian roulette and put to rest this wretched breed of politicians that constitute MCP Teams B and  C. Should they lose this election, the country will, in one fell swoop, be rid of Tembo and Chakuamba. Aging will drive in the last nail in the political coffins.  Muluzi may still be around in the incarnation of his son but he will have been reduced to a desperate figure spending much of his time around the courts. Mpinganjira will have to seek new allies and given his malleable character, he will go kowtowing to Bingu for admission to DPP.

Any Malawian with any sense of patriotism and moral decency must actively campaign against this incoherent and frightening menagerie of thieves, opportunists, murderers and lunatics. We can’t afford another “Lost Decade”. And we definitely can do better than what these weird voices from our dark past promise.

This will open up room for a new generation of politicians in our beloved country.

More on Nsanje Port

The prospects of the Nsanje port are improving rapidly. Mota-Engels and Djibouti’s involvements are only part of the story. One additional factor that may prove crucial is that the interest in make the Zambezi navigable is also shared by Mozambique. The huge coal finds in the Tete province mean that the rehabilited Sena rail line, from the Tete coal belt to the port of Beira cannot handle such large quantities of coal, Hence the search for other outlets. The two that have been mooted include sending the coal on barges down the Zambezi and building a new railway across southern Malawi to take the coal to Nacala. Down here in Chingwe's Hole we suspect Mota-Engels  knows more about what is cooking on the Mozambique side, hence its decision to build the facilities in Nsanje on its own.

On Djibouti and Malawi Agriculture

A few days ago Djibouti announced it would be investing in Malawi agriculture Read more. To understand this one has to understand the food needs of the Gulf Countries. I actually heard someone suggest that Djibouti might simply be a front for   Big Gulf Money.

Gulf countries are seeking investment opportunities in African countries to ensure their food security Read more and this.. Even more dramatically only last week Saudi Arabia announced that it would be investing US$800 million in agriculture to ensure stable food supplies

 The Gulf-Africa Strategy Forum held in the South African city of Cape Town from Feb 24 to 25. argued that Countries in the Gulf and in Africa can form mutually beneficial partnerships, with Africa supplying fertile arable land and the Gulf investing in technology, fertiliser and other agricultural inputs. Both FAO and  IFAD have  endorsed this as a win-win” situation.

 Only last week Tanzania papers reported   that Saudi Arabian investors want to lease 500,000 hectares of farmland in Tanzania  to grow rice and wheat.

According to Reuters President Kikwete is reported to have told the Saudis that Tanzania could lease them plots that covered up to 10,000 hectares each for 99 years.

"Tanzania is ready to do business with you ... There is 100 million acres (40.5 million hectares) of good arable land," Reuters quoted Mr Kikwete as telling the Saudi businessmen

 There are a number of things to consider in addressing  the Djibouti case. First, it is not the first time in Malawi. We already have Illovo in sugar and  Lonrho   will be entering the horticultural sector.  We also have  CRU involved in Piri Piri farming.

The second is the effect of this on overall agricultural development. Earlier attempts to turn Sudan into a breadbasket of the Gulf Countries failed and we ought to look at what went wrong.

The most critical issue for Malawi is that this must not lead to loss of land by peasants. Some have warned about the “Second Scramble for Africa”  and "land grabbing"so it is important that we do not create a new land issue such as the unresolved one of tea estates.  The government also ought to make sure that small producers can benefit from these investments as outgrowers, labourers etc.

First Modern Mine

And so finally Malawi has its first modern mine – the Kayelekera Uranium Mining http://www.google.com/hostednews/afp/article/ALeqM5iYW-oAsY10hHQQwmPtgVvevUGxaw.   

Bingu is  reported to have said: "We have entered a new era of economic development and transformation" . The mine will contribute to the country’s forex earnings, government tax revenue and  direct employment in the Karonga district. As such this entry by Malawi into the world of mining. It will also increase the domestic market for other producers. There are signs that other major mining projects are in the pipeline.

 It is said one reason that Malawi has taken so long before embarking on  serious mining wasDr. Banda’s aversion to mining. Apparently Dr. Banda had noticed that Ivory Coast with no mining was economically  doing better than Ghana with its legendary  gold mining. From this he drew the conclusion that Malawi would focus on agriculture. 

 Mining a is a double edged sword and this blessing can easily turn into a curse. In the worst case it  can negatively affect other export sectors through strengthening of the Kwacha. This has been called as the “Dutch Disease” after the negative effects on other export activities  of the discovery by the Netherlands of natural gas[1]. However this “disease” can be overcome by using the earnings to enhance the productivity of other sectors by, for example funding the formation of human capital (education, health etc) and the building of infrastructure and enhancing the productivety of our agriculture.  If, on the other hand, the “easy” revenue accruing to the state goes to pharaonic projects and wasteful consumption or simply fuels corruption  then the Dutch disease will hit us hard . There are also other political economy effects to consider – the distribution of the revenue along class and geographical lines.  Generally mining economies in Africa have the worst income distribution. This will be the subject of another blog. Watch this hole!

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[1] For a layman’s explanation of the Disease see http://en.wikipedia.org/wiki/Dutch_disease

Nsanje port

Bingu is obviously serious about the Nsanje port. He has insisted on having visiting heads of state travel with him to see the project. The recent visitor was the Djibouti President. The project itself is obviously important, bold  and imaginative. And Bingu is not alone in the region in thinking about the navigability of the rivers in the Zambezi basin. A recent report suggested countries along the Zambezi are thinking along the same lines as Bingu.

What seems to be missing in all this is enthusiasm from Malawi technocrats. This is a long-term project. The President needs to have the idea deeply anchored in the Malawi public,  bureaucracy and political elite so that it can survive him after he is gone. He also needs to identity someone who will act as a kind of “Project Czar”and who will devote all his/her energy to this project. 

Final point of Afrobarometer

Probably the single most important result from the poll which has been picked up by the press is that were elections to beheld now, Bingu would win the elections by 61 percent of the votes. There are all kinds of caveats behind this conclusion but this seems to be the most thorough poll we have so far. Chingwe's own poll gives Bingu 75 percent of the vote on the basis of the tiny and self-selected panel of 61 votes. So vote on this blog.

Approval - Afrobarometer

The good news for Bingu is that the apporval rate for him has jumped from 56% in 2005 to 83% in 2008.

According the survey Bingu’s approval rate in terms of a wide range of social and economic indicators in  2008 is higher than that of Muluzi in 2003. The interesting exception is with respect to water provision where Muluzi comes out better. The barometer authors interpret this thus: "This is significant in the sense that in all issues, the Mutharika Government’s ratings are significantly higher. This shows that people are able to spot differences. People perceive that the Mutharika Government has not matched the borehole drilling of the Muluzi era, but that Mutharika is otherwise running a far better government than Muluzi.”. It should be noted that in the North Mutharika does better even with respect to water.

The greatest gap between Muluzi and Bingu is over the economy, corruption and crime

Term limits - Afrobarometer

Afrobarometer asked correspondents to chose the statement that is closest to their view between the following statements: 1) presidents who serve the maximum two consecutive terms should be allowed to stand for office again after sometime as long as their political parties nominate them; and 2) once a president serves the maximum of two consecutive terms, he or she should retire and never run again. ^0 percent support term limits.

Support for Presidential Term Limit or Open Term

Support for Presidential Term Limit or Open Term	Count	Percent
Support for Term Limit	717	60
Support for Open Terms	427	36
Neither	39	3
Don’t know	17	1
Total	1200	100

Source: AfBS Malawi, 2008

Northerners (70%) were strongly for term limits.

Support for Term Limit or Open Terms at the Regional Level

Support for Presidential Term Limit or Open Term	Region
	Central %	North %	South %	Total %
Support for Open Term	35	28	38	36
Support for Term Limit	61	70	58	60
Neither	2	1	5	3
Don’t Know	2	1	1	1
Total	100	100	100	100

Source: AfBS Malawi, 2008

Rotational presidency - Afrobarometer

One  question Afrobarometer asked  was what people think about rotation of the presidency along regional lines. The idea was unpopular, and very much so in the Central and Southern regional. 39 percent of Northerners, as compared to about 22 percent and 20 percent in the Central and Southern respectively, favoured rotation. Would this be an indication of the belief that a Northerner is unlikely to be elected under the present arrangement?

 

 Support for Rotational Presidency at the Regional Level

Issue	Region
	Central %	North %	South %	Total %
Support Rotational Presidency	22	39	20	23
Against Rotational Presidency	76	57	79	75
Neither	-	-	1	-
Don’t Know	2	5	1	2
Total	100	100.0	100	100

Source: AfBS Malawi, 2008

 

On educational qualifications of the leader, an overwhelming 84 percent insist that university education should be the minimum. There were significant differences along regional lines, with 95 percent of the North insisting on this minimum as compared to 85 percent and 81 percent in the central and Southern respectively,

 

Table 9: Support for University Degree Requirement for Presidential Candidates at Regional Level

Issue	Region
	Central %	North %	South %	Total %
Support for Degree Requirement	85	94	81	84
Against Degree Requirement	14	5	17	14
Neither	-	-	1	1
Don’t Know	1	1	1	1
Total	100	100	100	100

Source: AfBS Malawi, 2008

 

On Chewa - Afrobarometer

Someone recently dumped several documents of Afrobarometer on Malawi in Chingwe’s Hole. They dealt with a number of issues which I will present one by one over the coming days, depending, of course,  on how much sunlight is allotated to the Hole, given the power rationing here in Zomba.

The pleasant surprise for us here in the Hole was that across all the three regions the majority of the population  (62 percent) accepts Chewa as the country’s official language. Surprisingly, given the popular perception, there is more opposition to this in the South than in the North. This could partly be because of the fact Chewa was seen to politically replace Nyanja.

Support for Chichewa as an Official Language at Regional Level

Issue	Region
	Central %	North %	South %	Total %
Support for Chichewa as Official Language	67	59	57	62
Against Chichewa as an Official Language	30	38	42	40
Don’t Know	-	1	-	-
Neither	2	1	1	1
Total	100	100	100	100

Source: AfBS Malawi, 2008