When you hear statements from our political leaders you get the impression that Malawi’s economic growth is dependent on foreign aid or donors.
Unfortunately, this is an erroneous view. And sometimes you mistakenly think that the International Monetary Fund (IMF) is running the country! We need to decolonise our minds and take control of our own destiny.
The reality is that the power to move out of the poverty trap is within Malawi. What Malawi lacks is political will to turn things around. The real issue is how to do it. There is too much talk, but very little action. Thus the responsibility to transform the economy rests on the shoulders of government and Malawians, not foreign donors or foreign investment.
Part of the equation to transform the economy is the role of State owned enterprises (SOEs). Government should ensure that it participates actively in exploiting the vast economic potential through SOEs. Some funds government raises through taxes should be utilised to create more SOEs to unlock the vast economic potential in agriculture, mining, tourism, manufacturing and transport. Machinery to set up some of these industries is not all that expensive.
Government should set up agro-based industries that would make school uniforms and other textile products such as shirts, T-shirts, trousers, dresses etc, a juice processing plant to make all kinds of fruit juices. Rail passenger transport should be revived to operate from Nsanje to Mchinji to boost intra-trade, construct five good hotels one each in Mangochi, Salima, Nkhotakota, Nkhata Bay and Karonga to boost tourism and also buy some boats for lake excursions. Government should also set up its own bus company to improve public transport both in cities and rural areas. We also need a mining company, as a matter of urgency, to work and exploit our mineral wealth together with foreign mining companies.
Government should also take lottery business seriously because it is a lucrative business to raise money. In countries such Zambia and South Africa, governments are raising millions of rand every week through lotto. This is a very simple product that does not require a foreign company. What is required is for government to invest a few millions of kwacha. Government can raise the initial capital either from taxes or borrowing.
SOEs have a vital role to play in transforming the economy. They are vehicles through which government can implement its national development agenda and deliver services to the citizens. Government cannot successfully deliver services to the people without its own structures.
While the private sector has also a role to play in economic growth, government should take a leading and bigger role. After all, political parties campaign on the platform of improving the lives of citizens once voted into office.
It is unfortunate that government seems to have transferred the responsibility to transform the economy to non-state actors (such as the private sector, IMF and foreign companies) who are not accountable to anyone other than themselves. Government should not delegate this responsibility to the private sector or wait for foreign aid or development partners; much depends on elected leaders. There is no such thing as a private sector driven economy. All developed countries are where they are today because of government leveraged production.
Where government enters into partnerships with private enterprises, it should ensure they are a majority shareholder with 51 percent shares because they represent millions of Malawians and, therefore, have a huge responsibility.
Malawi’s economic meltdown is a result of poor economic policies the UDF government pursued between 1994 and 2004, a decade of economic damage when government senselessly sold vital national assets to the private sector, many of them to foreign companies.
These government commercial enterprises were contributing to national development and government used them to achieve strategic national economic goals. The sale of SOEs not only deprived government of the much-needed revenue and foreign exchange, but made Malawi to retrogress in so many areas such as telecommunication, manufacturing, water and land transport, among others. Thus many of these companies have not performed to the expectations of Malawians.
For example, the privatisation of water transport on Lake Malawi has been to the disadvantage of people living along the lakeshore. Water transport is now very poor and the mobility of people is difficult compared to the time when it was under government. Telecommunication is still poor despite being in private hands. The list goes on!
President Joyce Banda who is the Minister of Statutory Corporation has a major challenge to ensure that existing SEOs step up their contribution to national development. The profits that SEOs make should be remitted to government for national development. The contribution of some of the public entities to national development is questionable.
