The last few weeks have seen the Malawi kwacha gain some value against the dollar and other major currencies. It is interesting news. Similarly, inflation is reported to have gone down, even though, it still remains very high by any standard. Drug shortages, apparently are said to have declined.
Now the question is: Is the recovery on the cards? We do not know for sure. What if we were to ask the average individual in some remote village of the country what this means to them, has there been any improvement in their welfare?
One thing that is sure is that the current tobacco season is at its peak. Naturally, there is a lot of foreign exchange flowing in. Could the immediate rise in the kwacha be a tobacco seasonal factor? Possibly the Reserve Bank might have simply splashed the market with foreign exchange. On the other hand, most farmers have started harvesting their produce and flooding produce markets with food. Again, such are usual seasonal factors that are experienced year in and out. Can we sustain such impetus as we head towards an election year, often associated with banditry and corruption?
Whatever the machinations behind the economic apparatus, the appreciation will bring some stability in prices and help businesses plan effectively. Some “wise-men” have attributed all these developments to “visionary leadership” of the country. The import cover is still a month and some 10 days, possibly including private holdings of foreign exchange.
Nonetheless, we can still give government thumbs up for making some tough decisions. Particularly, authorities have worked well in normalising relations with some of development partners, whose legal tender, we call foreign exchange.
But what does an economic recovery really mean? To the politician and theorist it possibly entails some favourable statistical indicators. Low inflation, a strong currency and some kind of high national food production amongst others. All that stuff that is right to talk about on platforms, loosely called macro-economic indicators. Often they do not highlight the plight of individual persons, businesses or households but simply present some rosy picture. It often doesn’t sound palatable if you are in power or a position of control.
Now look at the situation before the economy went into collapse under the late head of State. All the macroeconomic indicators appeared right including the kwacha that is now appreciating. At the peak of high economic growth, the average person was jobless and still living in mud hats without any sanitation. A majority of kids went to poorly resourced schools, and some still study under trees. Young people were jobless and opportunities still lacked. Hospitals, where the poor go to die, were without medicines and a few frustrated personnel that sometimes used personal resources to do some simple procedures. They are death traps.
The point is, the average person will ask a few questions and seek answers to some of the issues above to understand the meaning of a recovery. What has really changed in their daily lives? Sometimes we have become so elitists to the extent we forget the real issues; a majority of the country is worried about. Is the recovery trickling down to the average person? It’s not just a matter increasing salaries but getting the unemployed into the job market, especially folks in rural Malawi.
So what is an economic recovery to you? Be your own judge.