We had the opportunity to reflect on some of the developments that have taken place in this country since independence, last week. Quite impressive, I must say, but certainly not as much as one would have liked to see to realistically drill a dent into the poverty and misery Malawians face. Any GDP growth rate Malawi has experienced has, unfortunately, been chewed up by the several notches higher population growth rate. As a result, we tend to be regressing rather than progressing.
Just over a week ago, our national hopes were dashed even further with news of the massive devaluation that the Reserve Bank announced. Many commentators have given their analysis of the situation. It is clear, reading from the numerous narratives, that different people are interpreting the devaluation differently.
What is not in dispute, however, is that the economists among us are saying we had no choice but to face devaluation. It is the better devil, they argue, than to let the economy collapse under the heavy weight of an overvalued currency, which is what we have had for years.
Overvalued, because the official rate bore no resemblance to the parallel market rate. The latter is usually more accurate because it is based on the real demand and supply situation of the currency. Maintaining a yawning gap between the two rates is economic suicide. I was a regular visitor to Zimbabwe in the early 2000s and saw, first hand, the devastation their overvalued currency then brought to the population. Eventually, the currency was abandoned and they opted for the US dollar. How they managed to sustain the US dollar is beyond me, but one thing I can vouch for is that, unlike us, our colleagues have an abundant supply of gold and diamonds within their borders. If the same thing happened to Malawi, the country would immediately be consigned to its premature grave.
It looks like we just have to swallow the bitter pill and live with it. But most medication is not for the fainthearted. When I was a small boy, I had a friend who once visited the hospital with a tummy problem. When the medical officer asked him, “Mpati pakuwawa (where is the pain)?”, his response was “Pamimbapa ndi pa window po (My tummy and the window)”. In his juvenile thinking, the medical staff would spare him and instead administer the injection on the window. This was his own way of dealing with the phobia of injections.
There is life after devaluation, albeit one laden with economic difficulties. I have gone through quite a number of them before, and survived them! It will take some adjusting but it is not the apocalypse some people would have us believe it is. Be that as it may, we all naturally have a degree of phobia over devaluations. They more than leave a sour taste in everyone’s mouth.
Any attempt to determe whether this particular devaluation will cure our economic problems belongs more to speculation than to reality at this stage. My advice is that we should prepare for the worst while hoping for the best. Having said that, we should do all we can to try and stay away from economic prescriptions of this nature. It is okay to get sick, take medicine then get well. It is even better not to get sick in the first place, so that one does not have to take any medication. Not everybody who takes medication gets better. Countless people are now resting in peace in the cemetery despite having taken curative drugs of all descriptions.
The only way for Malawi to stay economically healthy is to generate forex. Not to rely on other people’s forex coming in as loans or donations. Let that come as the icing on the cake. But the cake we must bake. This, of course, calls for hard work.
Of course, working hard is not enough. We must learn to work smart, meaning that we must direct our energies to endevours that will add value to our lives. A hard working man can use his energies to dig up a deep hole, and another hard working man can use his to fill up the hole. These men will have worked hard but certainly not smart as their labour will be in total vain, having accomplished nothing of value.
It has been stated many times over by different people and I want to add my weight to the plea that we must produce, produce, produce. I would hasten to add that we must respect those who are engaged in production, as we respect those who are engaged in white collar work.