Honourable folks, the Reserve Bank of Malawi (RBM) earlier this week cautioned that the country’s economic growth might not be as high as initially projected on account of the Covid-19 pandemic.
The havoc Covid-19 has wreaked on Malawi’s economy since the pandemic struck last year is well documented. In the past year, thousands of people were laid off and several thousands more were forced to take pay-cuts at the peak of the second wave.
Covid-19 has presented one of the biggest challenges for the Malawi government—first the Democratic Progressive Party (DPP) regime and now the Tonse-led administration.
The different approaches taken by the different administrations and the impact they had on Malawi’s socio-economic environment highlighted the complexities inherent in containing Covid-19.
The DPP-led administration under former President Peter Mutharika focused on implementing stringent restrictions to keep the numbers low. The strategy was largely effective in keeping the number of infections low for the most part.
But those measures had a devastating impact on the economy. The early closure of institutions of learning across the country severely undermined the school’s effort to generate revenue through tuition fees.
Likewise, the restrictions on travel and curfews hit firms and institutions operating in the hospitality and leisure sector. As a result, lay-offs and pay cuts became the order of the day as affected companies sought to survive a hostile business environment.
After assuming power, the Tonse-led administration, presumably not wanting to repeat the mistakes of the previous regime, took a fresh approach. Chakwera and his nine-party alliance resisted the urge to implement strict measures to avoid disrupting economic activity.
The economy fared better. Companies were on the path to recovery and, for a time, it seemed Malawi had found a viable way of containing the pandemic. However, Covid-19 cases rose, and we lost hundreds of lives to the pandemic, including two Cabinet Ministers and several top government officials.
It seems there is no simple solution to manage the lives and livelihoods nexus in as far as containing the pandemic is concerned. Strict measures disrupt economic activity and threaten people’s livelihoods, while lax measures allow economic activity but threaten people’s lives.
Folks, that is a tough puzzle for any government to solve in the best of times. It will definitely be harder for the Tonse-led administration to devise a containment strategy that can protect both people’s livelihoods and lives, in the prevailing political-economic climate.
Malawi is heading into a second wave while health systems have not yet fully recovered from the previous wave of the pandemic. Public debt is rising, a development which severely undermines Government’s capacity to borrow more to revitalise an ailing health system.
Obviously, the solution cannot be in the strategies that were implemented in the past. Posterity has shown us they do not work. The good chaps at Capitol Hill just have to devise an alternative strategy.
Malawi’s safest bet would be to invest in vaccines. There is a need to get as many people as possible vaccinated at the earliest opportunity to ensure that the country reaches the 60 percent threshold required to achieve herd immunity.
Unfortunately, it seems the Tonse-led administration is reluctant to invest in a mass vaccination campaign. It would rather bank on donations. That approach is perilous. There is no guarantee that the donors would release the vaccines on time.
Folks, there is also a chance that Malawi cannot receive some batches of vaccines approved by donors because the country does not have the requisite storage equipment to store the vaccines for an extended period.
There are concerns that Malawi cannot store the other vaccines. Malawi’s best bet would be the Oxford-AstraZeneca jab. Unfortunately, the AstraZeneca jab has not been approved for distribution by some donors we are expecting to get our vaccines from, including the United States.
There is just too much uncertainty around the distribution of the donations for the Capital Hill to sit on its laurels instead of taking steps to buy the required doses in the short-term.
That is probably Malawi’s best bet of containing the pandemic. It has worked elsewhere; it will probably work here.