Wednesday, July 24, 2013

The Urban land question and squatters

A couple of weeks ago the Blantyre City Assembly demolished illegal settlements at the foot of Soche Hill. Most of the squatters cried foul after investing their hard earned money to no avail. Blantyre is not the only city beset by a problem of squatters. In the capital, there have been squatter settlements between area 49 and 18. Squatter settlements have developed in Ntandire, Tsiliza and area 51 close to the Kanengo Industrial area. Squatters also took over some Malawi Housing Corporation (MHC) in area 49 and there have been court battles with the “land owners”. Apparently some of the squatters are not average persons, but individuals of high standing that can afford services of private legal counsel, but are frustrated by deliberate red tape that fuels corruption in public institutions responsible for land distribution. The issue I raise is who really legally gets land to build homes in our urban areas? Or put it differently, whose interests does the Malawi Housing Corporation, Ministry of Lands and City Assemblies really serve? Normally, the city assemblies, the Ministry of Lands and the Malawi Housing Corporation are generally the main players in the land market for residential properties. I am not sure whether these institutions have taken cognisance of the rising population in the urban areas. The reaction to the rising demand for decent accommodation in the urban areas seems to fall on deaf years as the public land system appears too inflexible. One would be tempted to think that the public land system is deliberately failing to respond to needs of housing because of an institutionalised system of graft and corruption. The question again is who do these institutions really serve? Their inaction often crowded with one of the worst forms of bureaucracy has led to squatter suburbs in our cities. Sometimes, I tend to think of these institutions as a financial scam that is duping the public by promising them access to land to build their homes and collecting money from them. It would appear to be no different from the many tricksters in town running extortion rackets. Honestly, if individuals go in the Lands Ministry Offices, City Assemblies and the Malawi Housing Corporation and pay a fee and never get land, what would you call it? You can’t pay for a service and never get one. It appears only those politically connected or willing to pay a bribe are well served by these institutions. Consequently, desperate individuals have now taken matters in their own hands and developing properties without any plans or approvals. Sometimes, I wonder whether any serious planning takes place in these institutions. The Malawi population is growing at a very fast rate and the demand of housing is ever on the surge. We have a lot of individuals that are willing to build their own homes, but are frustrated by the institutionalised corruption that is a norm in the Lands Ministry, City Assemblies and the Malawi Housing Corporation. How many bribes are we going to pay? A bribe at ESCOM, a bribe at Road Traffic, a bribe to the Traffic cops and goes the list. If we can quantify bribes, the treasury is probably loosing billions of resources that can be used to stock our hospitals of essential drugs and develop our education system. Currently there is what I would call two types of squatters. We have the urban poor that have been more affected by lack of decent low cost housing and living in squalor. Most of these individuals encroach public land and build structures that barely come close to decent housing. Later on these squatters start selling their piece of their encroached land to a relatively affluent group of squatters, that I would loosely call “middle class” at a high price. Sometimes the same piece of land is sold to multiple individuals to maximise “returns”. Such is the reality that confronts the urban poor. The “middle class” category of individuals has been frustrated by public institutions to access land and has probably been on the waiting list for many years. Out of such encroached land comes decent homes, but not planned and gives a lot of complications with respect to provision of public utilities such as water and electricity. Never mind the erratic supply of water and electricity, it qualifies for a Phd thesis. The city assemblies in the process lose a lot in terms of potential revenue from city rates as such properties bear no formal registration. Demarcating and registering such encroached land in official registry is a costly process and takes years. City assemblies loose revenue that they need to provide various services. This group of squatters is well organised and has fought some successful battles in court. I don’t think our urban areas should develop suburbs from squatters and create towns in such a manner. While the Land Act has been revised and passed by parliament, serious questions still exist in the execution of land access. Institutions at the pinnacle of land distribution remain one the most corrupt in the country, and potential property developers are frustrated and continue to take matters into their own hands. Is it a question that no one at the political level cares? The question we should ask: whose interests does the Ministry of Lands, City Assemblies and the Malawi Housing Corporation serve? Surely, not the average person that wants to own a home or property but something else.

Wednesday, July 17, 2013

A rethink on graft and bribery

A fortnight ago, Transparency International, a Berlin based corruption watch dog released results of its corruption barometer results. It is different from their standard corruption perception index, but the results are stunning. In the report, they surveyed most countries in the world, including Malawi. Some of the questions hinged on asking members of the public whether they believed that to get a service, a bribe was required. It was not a matter of ever paying a bribe, but rather a belief that it has to be paid. I will not go into survey mechanics, but the results are shattering. Tuning into CNN, and other international cable networks, it was reported that 95% of Malawians believe that one needs to pay a bribe. The story also made headlines in the Guardian, an influential British newspaper, where a majority of our development assistance comes from. While not rating Malawi as the most corrupt country, the level of corruption belief was the highest in the entire world. In our current global world, perceptions do matter in as far as wooing and attracting foreign capital. Apparently, the story line came out at the time when the 61 billion kwacha talk was on the lips of every one that cares, no matter the degree, about this country. And the current British High Commissioner was also quoted in the media on how Malawians should ask serious on wealth amassing by political leaders in a few years without any serious investment. And this was no end as the ACB chief candidly put it that 30% of the national budget is somehow lost through corruption. We have graft, a form of corruption that is fuelled through politicians. It is a more complicated form of corruption in which we all are de-winged to fight against. Its effects are reflected in our 49 years of average households still living in endemic poverty while a few elites play divide and rule tactics through sophisticated means of manipulation of public opinion. The essence is to maintain a status quo. Usually we had lap dogs that do the bidding on behalf of powerful corrupt leaders, and share the spoils. Meanwhile we cherish at the idea of maintaining good relationships with donors as if we are entitled to foreign grants. The whole essence of political parties not being compelled by law to declare their sources of funding including compulsory audits provides a fertile ground for breeding a “scratch your back-I scratch yours” mentality. Examples are many, but think of the 187 million, National IDs, Land rover deals, as a reminder of how graft continues to deprive the national treasury of resources to develop key national infrastructure. The road network is still in appalling state, and the increasing energy demands can’t go without mention, all essential ingredients for attracting foreign businesses. The idea that we have a Uranium mine at Kayelekera operating with diesel powered energy is baffling. Well, as we swing to campaign mode, it will be interesting to see if any politician will go on a platform of graft. We surely do not British tax payers to pay for paracetamol or to educate our kids. It surely undermines our dignity as an independent country, especially when public resources can be willy-nilly abused. Most corrupt individuals are getting away with it, and it gives motivation including extra incentives to new comers. The war can only be conquered if the legislation on asset declaration including punitive measures for non-disclosure is put in place. Similarly, as long as there is no legislation in place to restrict political party funding including individual donations that come from persons/corporate entities and their surrogate companies, graft will haunt us for years. We may even become a laughing stock in SADC. Without losing the much needed focus, let me say Malawi needs foreign capital to develop. You only need to look at the balance sheets of all commercial banks and realise that they cannot raise enough capital for projects that require billions of dollars to help us cut poverty levels by half. The reality is that perceptions do matter in attracting foreign capital and investment in general. Graft is a huge cost, and the more we are perceived as thus, we can remind ourselves that Africa has over 50 countries, not just us. It’s a competitive environment otherwise we couldn’t be fighting for our lake with its fast dying fish.

Friday, July 12, 2013

Affirmative action in public-private partnerships

A senior politician recently remarked about the ownership of prime properties in urban centres. The observation was right as it so rare to see commercial properties in urban centres owned by indigenous Malawians. The remarks came after the land bill was passed by parliament in which foreigners can only lease land but not own it. Infact, they should lease land with a title and pay monthly rent to the freeholder or government, if it is public land. We have heard of rude and derogatory lines like “dziko ndi wanu ndalama ndi wathu many times and this calls into how Malawi can put in place necessary affirmative actions to ensure increased participation in business by indigenous persons or the majority of some kind. Generally, I would hail the Land Act as a right step to ensure the majority of Malawians are empowered economically by owning their land, and reaping benefits to educate their children. It could even be better if foreign businesses would lease land that has a title to indigenous owners and pay rent on a monthly basis. Since 1994, we have seen a wave of privatisation of public corporations and the establishment of the Malawi Stock exchange(MSE). It has opened a number of opportunities for individual investors to put their funds into some of these companies. But a majority of individuals, or to be precise, indigenous Malawians have not been favoured but preference given to foreigners, especially those corporations that have not listed on the MSE. This is where I have a problem, not just out of national pride or patriotism, neither ambivalence to foreigners, but the billions of tax payer’s money put in establishing these public corporations. Either the capital injected at the onset was a grant or loan; such funds are naturally intended to benefit Malawians and we continue to service debts anyway. It is naturally imperative, that indigenous Malawians should be given preference in owning public companies that go through the hammer by a deliberate affirmative law that defines ownership structure. In some cases, the ownership can be established by law. Otherwise, it is so easy to loose all our key investments to foreigners for a dollar simply because we want to balance the national budget. It is interesting to see how we have tackled affirmative action in this country. Consider the case of the Quota system in selecting students to Universities and national secondary schools. I hold my own opinions, but it has hallmarks of affirmative action despite its controversy. We can draw some parallels and see how it can be applied to public-private partnerships. In Zimbabwe, they have taken affirmative action with respect to foreign direct investment particularly in key national industries such as mining and invested heavily in education. Literacy rates are the highest in Zimbabwe than any other sub-Saharan Africa by the way. It does not mean that we have to increase literacy rates before addressing the issue of ownership of privatised companies or major natural resource investments. The ownership in Zimbabwe is set at 50%-50% for major investments to ensure locals have opportunities in economic development. It empowers the indigenous people in a much great way than a fertiliser subsidy. In our case, for instance we have 15% ownership in a major mine. I would think the reasoning of the quota system should be applied to our natural resource industries, especially with prospects in oil and immediate opportunities in mining. In the United States for example, no foreign investor can own more than 25% of any airline. Now that we are taking major strides in strengthening public-private partnerships, the relationships need to be clearly defined to benefit Malawians, particularly indigenous citizens that call villages in rural Malawi home. We can put this to reality. Precisely, we need to urgently enact laws that stipulate in clear terms that public corporations going for sale or investments in mining/oil have a 50% ownership by indigenous Malawian though a public citizen trust fund. There are many ways of doing it. One route is through a Malawi Trust Fund, whose sole responsibility is to safeguard our economic and business interests as indigenous citizens including potential environmental hazards. People do not take pride in asking for handouts such as fertilisers or farm inputs, but have dreams just like the few favoured foreign elites that control business or get all deals when public corporations are privatised. Most of us would like to see the 31% stake that government intends to sell to the public in the Malawi Airways go to indigenous Malawian investors. While public-private partnerships appear as an attractive liberal public finance restructuring paradigm of modern day investments, we simply cannot ignore benefits that come with affirmative action policies in business that favour the most vulnerable. It is one straight path towards financial and economic independence that we do not have after 49 years of the Republic. Feedback:

Travel options to boost domestic tourism

Some few days ago media stories carried perennial tales about billions of kwacha’s tobacco sales have locked in so far. It is perennial in the sense such hype has never stopped questions about the future of the green leaf. Someone is trying to impress the industry is on track, but the reality is different. We can as well not expect any change in fortunes in dollar terms from the auction floors. At the same-time, I think, as we desperately, and possibly strategically, seek alternatives to diversity, a critical look at travel options to strengthen tourism, a lullaby, that has been played for ages. It looks quite interesting that the Ministry of Tourism took some serious steps to establish some site, instead of posting their strategic plan online, was the case some years ago. Recently, privatisation or liquidation, whatever term you like, of Air Malawi was completed. A new company was established and a foreign carrier, Ethiopian Airlines was the successful bidder. There is nothing wrong with them; at least government did away with a business that was a drain on public funds, even though the new owners are also tax payer owned. It doesn’t really matter, as long as we don’t have to pay our taxes to bail out a three aircraft airline with 400 workers. But what is important is they offer less expensive travel to our tourism industry, and not simply using KIA as another hub for transit passengers, mainly to domestic destinations. It is interesting to see how the civil aviation market has evolved over the years, and indeed how the general public views flying now. One can say that the times Air Malawi did flights to Dubai or the Tuesday shoppers’ flights to the city of Egoli, the general public generally patronised them well, except for a few airline culprits that cost the airline with non-sensical privileges that come with a poorly managed business . They were few tickets paid by the tax payer, in my opinion and the routes financially feasible. There has been a cadre of business persons, not too rich, but medium and small of some kind that have risen over the years. It’s been like, flying is no longer a tycoon’s exclusion, but many small average persons can afford it, and further opportunities exist. The African middle class is steadily rising, and Malawi is not being left behind, and opportunities to get our tourism to a higher level through affordable travel are enormous. Only if our airports are developed and handle a range of equipment, particularly domestic destinations. Our thoughts should now go into investing a lot into our airports beyond Kamuzu International and Chileka but mainly our prime areas of Mangochi, Likoma, Mulanje, Karonga, Mzuzu, Liwonde and Nyika. I don’t think it is in our economic interest to let Ethiopian Airlines use our country as a feeder hub into Addis Ababa, and simply out muscle their two major competitors that way. I don’t think that was the intention of Air Malawi sale, but it may turn to be so. It is important that no excuses of poor airport infrastructure are made for any potential carrier to most of our unexploited tourism gems. Despite the current mess, Malawians have shown interest to travel and explore their own country. But again it all depends on putting extra money to improve infrastructure of all our airfields, and to make it easy for small operators to service our domestic destinations. At the moment it can cost someone more money to fly to Likoma than Johannesburg or Lusaka. Examples abound of passengers stranded in the middle of the lake in some sea unworthy boats because there are no regular flights to the two islands. Just of the many examples, but steadily, our tourism can incorporate a strategy with the capital hill machinery that tobacco substitutes are real, and effective to secure the economic future of country. All we need is some serious investment in our airports, beyond the main two, as Malawians continue to demonstrate that flying is affordable. We need to move with the times as Africa is the next big thing. Feedback:

Rethinking Political fuelled corruption ahead of elections

Not long ago some politician made headlines by claiming we are all corrupt in this country. Sadly, he ended up getting convicted on similar charges down the line. Some would call it a self-fulfilling prophecy but it was more metaphorical. The statement was a matter of defending a regime, at its prime had scars of the Exercise Book, Landrover, Tata, Petroleum and National ID shady deals. As is the case often, someone is usually given the mantra to counter obvious truths, no matter who is calling the shots at plot 1. Most of such acts are committed with a veil of public interest. The intellectual side, however, of the “we all are corrupt line” give us further understanding in how we define corruption. For instance the Corrupt Practices Act, under which the ACB has carried its mandate, with varying degrees of success, is quite clear on specifics of this vice. Simply one would think corruption is some way of gaining undue advantage to one’s gratification through crooked means. But other aspects are not very clear just like our tendency to say thank you with a monetary gift for a service we have duly paid for. Tipping in the third world? Since the ACB was established some years ago, we have often been very critical of its success, and many have linked it to a machine for oppressing political opponents or a publicity stunt minded organisation that has successfully prosecuted “20 dollar bribe” suspects. It could be true, but each one make own judgements. The record is there for all to see. Nonetheless, we continue to view the ACB from the perspective of who committed a particular corruption related crime, and how we define the offence. Our society however has loads of corruption that we have let go and considered as a normal, and it is beyond the domain of any prosecuting agency to fight. Maybe someone was right to argue the fact we are all corrupt. And those that have exercised control over leadership have fully taken advantage and the in the process we seem to forget the roles of an elected government. I contend that using tax payer funds under the guise of personal resources to offer certain public services or social protection is corruption. It is even worse when one’s wealth does not add up. In this day we still glorify some alleged philanthropists that go on the podium dishing all sorts of things to vulnerable people. There used to be some gentleman or lady, can’t remember which one, that used to go around the country with a truck load of maize and some 50 kwacha bills distributing to “his or her people”. Sometimes huge cheques were given out to fund a particular project of some kind. Surrogates similarly run nocturnal errands in suburbs and villages with khaki envelops of different sizes, to corrupt minds of the vulnerable on Election Day. The trend has never stopped and all “alumni” of the thuggery school have behaved no different since 1994. This is a form of corruption that is not within the practical reach of the ACB but nonetheless, it is and we must stop it through relevant legislation. It is corruption in the sense, that the average person is manipulated with a veil of philanthropy in the form of “platform benefits”. But the real catch remains the intent to influence voting behaviour for one’s political benefit using tax payer funds or even personal funds. Any act that is meant to deliberately deceive, such as giving some benefits to a vulnerable person in return for a vote is no different from a clinician sedating their patients to commit a crime. Now that we head toward elections, we can as well reflect on the law of asset declaration. Some soul searching is required. The law on political party funding is almost non-existent. It is time that we enact a law that puts limits on how much money individuals or businesses can give to a political party. If political parties can get millions from individuals, one can expect that in power they will somehow clandestinely pay such donors using tax payers’ money in ways not in the interest of public finances and tax payers. We have too many examples around the country. The current statue in asset declaration is not enough and a fertile recipe to perpetuate wanton abuse of public funds for self-aggrandisement. We need potential leaders that can commit themselves to protect our hard earned tax by enacting legislation with punitive acts for all senior public and elected officials that fail to account for their wealth before and after office. In other words no one should assume office if they have not provided a detailed list of their wealth. Similarly benefits should not be given if one’s wealth is not accounted once they leave office. Otherwise there is nothing to hide, and all public leaders must understand that serving the nation is a matter of trust, not an entitlement. Is there anyone out there seeking the highest office and willing to take on such bold reforms and make it their campaign promise? Otherwise the line, “we are all corrupt” may hold some nasty truths, unfortunately.

Imaging a destination

There are some very hard jobs around, and they include those mandated in whatever way to sell a product or a service. Even better, it can be selling a country as a destination of doing business or investing of some kind. While the line between marketing and advertising is very thin to a commoner like me, it all borders on attracting someone to spend their money without fear of any regrets. Imagine those guys that have to go out there and convince potential investors or tourists to visit our country. Those hidden costs, we all know and yet are so adamant to change things, simply because we have done it that way. And the shock those that have made an attempt often encounter and the consequent scars that are stubborn to erase, like the reappearance of a cockroach. I am told, it can survive sparks of highest thermal blasts. That is how difficult it can be to get a country going despite perennial recovery plans or strategies of some kind. Some weeks ago, I have considered a number of issues, that to some extent define our country. Every action or policy statement we make, generally defines how Malawi is viewed by those that have an interest in this country. Image matters just like one’s “resume” in their professional lives, and otherwise. As a matter of fact, it simply makes the job of those guys at the Malawi Trade and Investment Centre easy, and our various “competent” economic attaches. It is also a fact that anyone with an interest in our country will gather as much information as possible, and from various sources, not just an out-dated government website. It also creates an image on who we are, and whether any talk is indeed matched by actions. The reality is that most of the times, a country’s image is stereotyped, and it becomes very difficult to convince the outside world otherwise. I consider various images that our country has. Some good and some very questionable. On the positive side, Malawi is generally a peaceful country that has known no civil conflict. We have hosted various displaced people from other countries. Similarly we boast a professional military that has undertaken various civilian and peace missions across the globe. I remember the air wing operations in Mozambique, even with two choppers, did great works to save lives. But we are not the only peaceful country, and cannot therefore permanently brag about this. We are corrupt as well and other countries are less corrupt. Now consider everyone talking about limited ours of electricity. It is usually from businesses and households alike. It has now become normal that 24hrs of electricity are a miracle. The water mess has joined the band wagon. And if you are a property developer, the process to have water and electricity to your building can take ages, unless you cut corners, and do things that put us unfavourably on the corruption index. It’s all part of an image we have continued to imperfect and detrimental to our own dreams or portraits of some kind, never mind the colour. They can be blue, black and anything else. Meanwhile the cost of living and capital and living continue to skyrocket, and the Malawi kwacha is steadily heading to the archives. I don’t think a country can easily sell itself as investment destination with lending rates at over 40%, rivalling the perpetually demonised loan sharks in the suburbs. It’s how an image develops and gets processed. If it is indeed a bad photo, you try another shot. But in reality, it means trying out another country to do business or visit for leisure and no surprises. Commons sense is a reality that prevails most of the times. A few lucky cats have the audacity to define the current malaise as an economy in recovery, a case of stone throwing abode a glass house. It doesn’t matter whether the cat is black or white. It is a good cat if catches mice recounted a chinese politician. I reckon cats should be aware tyhere are rats around and go for the kill instead of creating a false image of non-existent hunting missions, when in fact they are devouring the masters food bank, a case of public funds. One can sarcastically link personal comforts that arise from tax payer funded Toyota SUVs. If you can ride in them, it is so tempting to imagine an economy recovering yet staple foods are no-where in sight. Do you remember the wise-man that asked for a list of names that had died of hunger to confirm if indeed such a crisis was rampant? We are creating an image associated with perpetuation of economic inequalities, usually a recipe for class wars. The great thing about images or perceptions is that they evolve overtime and find their way into our ways of life. If leaders remain detached from reality, and create their own image of a country, it actually leaves us in some trap. Someone out there is also creating an image for our country using all the facts, that are ignored as we continue mask the “God fearing” cloth. In attracting serious minded investors or even tourists, not visitors from the other side of the M1 road at Lizulu, facts matter and comparisons are made with countries in the region. In guess, any talk must be matched by meaningful action otherwise, the great world of information technology is on finger tips of any potential investor or tourist that can inject any money into the country. Tales of an education and health systems on near collapse and all these play a part in how a competing world looks at us. We can’t be beggars for life but, can actively define our destiny. We may create a certain image, and engage “marketers” but the world is getting smaller, and until most of us think beyond the day of final breath, the future doesn’t look good.