If I was asked what I considered to be the greatest problem vexing Malawi, I would probably single out the shortage of forex. I have seen it coming over a number of years. I remember writing some ten or so years ago about our supermarkets being stuffed with a disproportionate number of foreign goods in comparison with local goods. We have been draining our forex into these imported goods for far too long. The problem is exacerbated by our being export shy.
Somehow the general feeling is that one individual or one small group of individuals must ensure that the country has forex while the rest of us just sit and watch. In the meantime, the services and goods we get from abroad must continue unabated, most of us would be quick to proclaim. Agreed, we cannot impose tariffs on imported goods and remain a friendly nation on the international markets. Others would do the same to us in retaliation, leaving us in the cold. But we can surely develop the habit of shunning foreign goods in preference for locally manufactured ones without offending anybody.
Like I have stated more than once before, the biggest guzzlers of forex in this country are the two f’s: fuel and fertilizer. If we are serious about bringing sanity to our forex situation, we must resolutely deal with either or both of them. Politically unpalatable decisions will have to be made.
It is public knowledge now that this country needs upwards of 600 million US dollars per year to import the fuel that we need to keep our vehicles on the road every day. When you consider that our total exports shoot just slightly above 600 million US dollars annually, the situation is a scary one as there is no forex left for anything else. And yet we need to bring in fertilizers worth about 300 million US dollars every year. I have not factored in other important imports like pharmaceuticals or household goods. This is a precarious state of affairs, to say the least.
It may not be a popular thing to do, but the affordable input program (AIP) needs to be discontinued. Many commentators have pointed out that AIP does not help the poor subsistence farmers that it is intended to help. Many of such farmers remain food insecure year in year out despite getting subsidized fertilizers. They are not the most efficient farmers, as a result of which the fertilizer they get essentially goes to waste. What would be more useful is to give them grain. Let those that can grow the grain efficiently, do that, with or without the help of Government. With efficient farming, the farm commodity prices will be reasonable, certainly better than what they would be if the farmers were inefficient. Government can buy some of the produce and distribute it to the vulnerable farmers, the ones that AIP targets. What is more, giving such farmers a local product will be far less forex intensive than giving them imported fertilizers.
There have been pronouncements to the effect that some of our imports, not excluding fertilizers, could be paid for in local currency or by barter arrangements. If this can indeed be realized, it will be the next best thing to happen to this country. But the reality on the ground is that it is easier to verbalise these kinds of innovative ways of transacting than to convert them to tangible action. The impediments are many and varied. For starters, the Western controlled monetary system will not tolerate any departure from the established financial practices which favour them. They will surely do everything possible to frustrate such attempts. I think we need to engage in extensive soul searching before this dream is realized.
Barter arrangements would be even more complex. At the time of writing this article, the story of a commodity exchange program that had been embarked upon seemed to raise more questions than answers. The nation awaits with abated breath the conclusion of the said arrangement.
Fuel is probably a bigger source of headache than fertilizer. We need to have a plan to switch to electric cars sooner than later. It is disturbingly surprising that while the whole world is gearing up for electric cars, it is business as usual here. With electric cars, our dependency on an imported energy source to run our vehicles will diminish, as will our need for huge chunks of forex needed to procure the fuel. We need to start installing charge stations now. Some of these will have to be solar powered, as supply of power in Malawi can be erratic.