Let Tobbaco growers operate foreign currency accounts, they are exporters!

The tobacco selling season is here again and the prices have been somewhat satisfactory though not the best. The IMF has been on a strong collision with the Reserve Bank decision to get tobacco dollars straight from the auction floors. Its not the first time RBM has done this. I am not sure whether it has achieved the core issues of foreign exchange shortage. It appears like fire fighting. The IMF argues that the tobacco dollars be left with commercial banks. The essence of the thought remains that banks can effectively allocate foreign exchange to private business and individuals. Sounds like a very compelling argument to keep the Reserve Bank out of the tobacco auction floors but in all this talk I pose a serious question. Who effectively owns these tobacco dollars? It’s the farmer. Let them have US dollar accounts.Bingu wa Mutharika fought wars against tobacco buyers. He argued farmers were given a raw deal. He went further to chase out of the country a tobacco company senior executive. To him was attached the buyer-collusion theory that exploits farmers. But the late head of state was economic with the truth or carefully selected his arguments. Either he devalued the Malawi kwacha so that a dollar sale of the green leaf gave the farmer a lot of kwachas or let the farmers get the dollars straight into their accounts. He never instructed RBM to stop getting dollars from the auction floors yet he was fighting for the farmer. The former president never liked any talk of devaluation and so went ahead to fight the tobacco buyers. Farmers in Chipata even called on the Zambian government to follow the Malawi example as reported The Post of Zambia sometime last year. For some reason, I believe that the tobacco industry, its regulatory bodies, and the government of Malawi exploit farmers as well. They buyer is not the worse devil or satana.Consider the way Malawi has been running foreign currency accounts over the years. Exporters are allowed to keep a certain portion of foreign currency in their foreign currency accounts. This protects them from major changes in the local currency. Consider exports of sugar, in which Malawi has over the years enjoyed preferential access to the European market. Sugar is produced by a multinational company in this country and they receive their proceeds in foreign currency and keep it comfortably in our banks. The money doesn’t go to RBM but is available to them anytime they want from their respective dealer banks. Similarly, we can think of tea exports by the various tea growers in the Thyolo-Mulanje area, mostly foreign owned or have origins from foreigners. Such companies comfortably export their tea and receive their proceeds in foreign currency. Again, the Reserve Bank does not get their forex. Tea growers happily maintain their foreign earnings. The same applies to the Uranium mining in Karonga, though the situation is slightly different in the sense that they keep their foreign earnings offshore. It could be the same case with the other businesses such tea, sugar and hotels.Back to the tobacco farmer. Who are these tobacco farmers? I prefer to put them into two groups. The “big” farmers with huge hectares of land and the average “small” with possibly a hectare of land. In my mind, both of these growers are tobacco exporters. They sell their tobacco at the Auction Floors to foreign buyers in US dollars that consequently ship it all over the world. These growers/exporters should be allowed to keep their proceeds in the currency of sale, the US dollar in this case. After all foreign currency accounts are meant for exporters to receive their proceeds. A tobacco farmer is no different from the tea growers or other multinationals involved in exports. RBM should have no business to get their money and give them the Malawi kwacha. They never sale their tobacco in Malawi kwacha. Why should we blame the buyer when infact it is our own public institutions and banks that are screwing the farmer? Commercial banks have been at it all, giving all sorts of “tobacco accounts” to farmers wooing them with dubious incentives that are nothing but mere serpent minded banking. Remember the smiling assassin? These dealer banks have never liked the idea of RBM getting forex from the auction floors and have selfishly argued that tobacco dollars should go to them. Both are wrong and are part of the equation that is exploiting the farmers. Tobacco dollars do not belong to RBM or Commercial banks but to the exporters, tobacco growers in this case. In anything if the tobacco dollars go the banks, it should be in the accounts of the growers.Why do we always pick up a fight with tobacco buyers? Infact it is our own institutions that are partly exploiting our growers. Is it because most of tobacco farmers are peasants scattered across the country? Sometimes I wonder the hypocrisy of politicians. They can pretend to fight for the street man when in essence do promote interests of conglomerates or capitalists. Why should multi-nationals enjoy such privileges but deny tobacco farmers the same opportunities? The farmers can decide for themselves when to redeem their dollars into Malawi kwacha cash equivalent. When it suits them, and not when RBM or banks think it is right for them. Tobacco farmers also require safeguards against inflation by managing their proceeds in foreign currencies just like other single major exporters. Allocative efficiency is only attainable if returns to businesses are given to the rightful owners in a manner of their choice, and not an RBM-Commercial Banks pre-thought. That is how market forces work.Don’t shoot the buyer but have a closer look at the banks: from the mother bank to all of them.

RBM independence is long over due

President Mutharika has used every opportunity not to devalue the Malawi Kwacha. He has also gone flat out to blame forex bureaus’ as conduits for leakage of foreign exchange out of the country. In reaction RBM moved in and raised capital requirements for forex bureau operators and went further to instruct them to align themselves with authorized dealer banks or faced closure. The battle was fought in courts to no avail. Most of them closed business, and some jobs got lost and those that remained, found themselves in convenience business partnerships with banks. The banks of course smiled. They established subsidiaries companies called “forex bureaus” or whatever you name it. It just rekindles the debate of RBM independence and its effect on the Malawi economy. Have matters of monetary policy have now become a responsibility of state house or capital hill? Has the Malawi government tight grip on RBM yielded the macro-economic benefits that this country yearns for such as employment, low and inflation interest rates? After all the high GDP growth induced by fertilizer subsidy did not even require a tight control of RBM. We can achieve higher economic growth without State House telling RBM what to do.Generally, I have no doubts. The economic brains at RBM are smart enough and are some of Malawi’s finest in matters of monetary policy. While RBM remains a public institution and hence subject to control by its shareholder, Malawian citizens, through elected public leaders on trust, issues of independence over monetary policy and financial prudence are be better managed without control of statehouse. Examples abound. We can look at the issue of closing of forex bureaus or simply making their business deliberately difficult, which in my opinion was motivated by presidential accusations of the former siphoning forex. Its usurping the powers of a central bank and a vote of no confidence about their supervisory functions. I don’t think they failed. Were forex bureaus really siphoning forex? Whatever the case, it does raise some questions about some demerits of the executive arm of government or simply, the presidency directing RBM what to do. A fairly independent RBM on the policy front is a fair go to effectively implement monetary policy and price stabilization, one critical incentive a serious minded investor looks for.We can see that such interference is now making the job of the RBM more difficult, traditionally price stabilization or inflation control. Closure of forex bureau just gave Malawians keen to conduct business legitimately to explore alternative markets for foreign exchange amid the mediocre service of our commercial banks, plus the monopoly they now enjoy in the forex market. While forcing forex bureaus to align themselves with dealer banks makes some supervisory tasks easier, forex monopolies owned by banks have spilled but not competitive, because exchange rates are determined by State house. Unfortunately, the forex has not gone into the banks and easily slipped onto the street, and its scramble is inducing high inflation. With RBM loss of Malawi Kwacha control and management, its ability to contain inflation is compromised. All I am saying is, RBM is much better placed to manage exchange rate and money supply independently as opposed to state house. Framers of the RBM Act had this in mind. After all forex bureaus were by law required to maintain foreign currency denominated accounts with authorized dealer banks and RBM had better knowledge of money circulating around than now.Similarly, matters of exchange rate control while debated at length with contrary views, still put in question why our central bank is better placed to manage the kwacha unlike the President. The Reserve Bank of Zimbabwe does not have a currency to manage, and I am afraid this is a path we have taken. The ZIM dollar was controlled and managed from State House. It is now a good souvenir. Without dwelling much on merits of devaluation or maintaining the status quo, the price stabilization goal of the RBM has now become more complex. As we anticipate further increases in inflation in the coming months, not from seasonal factors but rather general macro-economic collapse, it will be political suicide for state house to let RBM decide competently on a rate rise. At the peak of US economy meltdown, Barack Obama was quite busy trying to convince a conservative led Congress to bail out the Detroit big four car companies and Wall Street banks while Ben Bernake, the Fed Chairman (Reserve Bank of the US) took upon himself to explore different measures such “quantitative easing”, flooding the money markets with USD, a ‘polite’ devaluation technique to fight the recession. Their relationship was mutual and eliminated any conflict between monetary and fiscal policies. But what I see in this country is very different. It appears the President determines monetary policy and potentially taking over the role of the central bank. At the same-time, he determines fiscal policy at capital hill without question as evidenced by a unilateral decision to host expensive summits such as the AU without parliament approval and purchase of a jet without parliament approval. I believe Statehouse or the presidency should loose grip of RBM and let it make independent decisions on aspects of monetary policy that are in the best interest of the country and the economy in general. The presidency and cabinet need to focus on their dream of making Malawi an export led growth economy. No one needs to educate him on this as the DPP manifesto is very clear. Forex flows into countries whose growth is export led. Our new friends from China are classic example. More concern should be given to reducing unemployment and attracting foreign direct investment as opposed to telling RBM what the exchange rate should be or which forex bureau is siphoning forex out of the country and needs closure. Systems of bank and non-bank institutions supervision are well established at RBM and managed by very competent people. The President should be more concerned with numerous power outages, unemployed youths, unpaid primary school teachers, a collapsing health system, government red tape in establishing new businesses amongst others. These are supply side issues that are quite critical in making Malawi an attractive business investment destination.

VAT on bank charges, a growth reducing policy tool.

It must be removed.The Malawi government, through its tax collecting agency, Malawi Revenue Authority has started collecting a Value Added Tax, rated at 16.5 percent on bank charges. It is obvious that this is another desperation by the government of Malawi to balance its budget after major donors froze budgetary support citing human rights violations and poor economic governance. Malawi’s financial institutions have accordingly include the VAT in their charges. In short, VAT on bank charges will not enhance economic growth, over tax Malawians, increase the cost of doing businesses and strengthen informal channels through which foreign exchange comes into this country. It is an ill-conceived tax policy tool in a country where a majority of people do not have a bank account, and consequently cannot meaning fully save. Besides a high withholding tax rate on personal savings income still exists. Worse still some foreign companies enjoy tax breaks/holidays while the average poor folk has face the music. We can examine the various channels of how economic growth unfriendly the VAT is below.Almost all services that banks offer are charged somehow and mostly explicitly. If you maintain a current account, one often pays a monthly fee of around MK500. And if you use an internet banking facility with the same bank that also comes at roughly the same MK500, your monthly charge now will come to MK1000 plus 16.5% VAT to MK1165. If your relation happens to send some much needed cash from overseas like USD1000 into your Malawian kwacha account, the bank charges 1 percent commission which is USD10. Because there is now a VAT, the bank will deduct around 12USD. Similarly, if you want to have your ATM card replaced either through loss or expiry add 16.5% to the cost. If you want to procure goods abroad, the bank will add 16.5% to what they normally charge. Even buying forex from the banks will attract an extra cost. We can think of this for private businesses as well. The list is endless but the implications are many, unfortunately not very good. If you add all these up, one notes that it is costly to keep money in a bank account. It looks like the government of Malawi has now become a silent shareholder of all banks and making a killing through commissions masquerading VAT.Firstly, we need to understand that Malawi has a very low savings rate, to be precise negative savings rate. The Malawi government has been saying a lot policy wise to encourage a savings culture and we have seen banks open up and reach many parts of the country to reach the unbanked masses. Banks too have becomes so innovative and introduced various products beyond traditional savings-cheque accounts. However, the VAT, in my opinion militates against the very policy objective of encouraging people to save. Malawians, especially those that have a regular income, don’t earn enough and it will remain economic foolishness for someone who earns an MK10000 to put it in a bank and pay 16.5% on various services. This is besides customers paying a withholding tax on their interest income on savings account. Factor in, people who do not have a regular job or women groups that get loans and have to open up accounts. It kind looks a policy of desperation.Secondly, in terms of major businesses that import, costs of doing business are likely to rise . Bank charges on lines of credit, in which foreign suppliers are guaranteed payments from Malawian importers now attract VAT. Such importers are likely to feel a pinch as the VAT clicks in. This is besides commissions they have to pay whenever they undertake normal forex related transactions like purchases of foreign exchange. Under normal circumstances, businesses are likely to scale down, and the situation will get even worse as Malawi’s credit rating is sliding to dog level. This is compounded by the harsh environment that the businesses operate such power outages. Lack of foreign exchange and overvaluation of the Malawi kwacha.In short, the impact is a likely shrinkage on savings in the official banking system and a rise financial transactions through informal channels. Has the Malawi government ever wondered why the total value of official imports is much lower than the sales of foreign exchange from the banking system even if valued at the so called black or parallel markets? It has become so common amongst Malawians to ask their friends or family in the diaspora to buy things on their behalf and make payments to their local accounts or even give Kwachas to their families. This a very big informal bank at the moment operating amongst Malawians here and across borders. It has kept Somalia and Zimbabwe afloat. While it has been fuelled by the overvalued Malawi kwacha and consequently depriving the banking system of foreign exchange, introduction of VAT on bank charges, is only strengthening such channels of informal finance business. Not long ago the governor of the Reserve Bank was in DC, trying to convince Malawians in the diaspora to remit their money. The fact is many do, but are not using the banks due to many charges and the over- valued exchange rate. The VAT is one of them and the banks will soon tell us the impact it has on their balance sheets. Whoever might have been crafting this policy or conceived the idea of VAT on bank charges, fell short of giving appropriate advice to authorities that maybe. The economics is bad. It is nothing other than a treasury decision to collect revenue without due to how that revenue is generated: businesses and individuals that are heavily taxed. In earnest, the Malawi government budget has ceased to be a tool for economic growth but a channel for revenue collection. Being one of the poorest countries on earth, worse still without civil strife, we need to learn that nationalistic and protectionists policies will lead to a path of more chronic economic decline. Time to reflect on our relationship with our donors and the IMF otherwise we are doomed for a catastrophe. Our economy will continue to shrink. I don’t believe in the growth numbers.

Strong kwacha will not deter rise in prices

Official data from the National Statistical Office (NSO) shows that inflation has hit double digits in January 2012 to 10.3% from 9.8% in December 2011 . Non-food inflation even went further to 14.9% in January 2012 from 14.4% in December 2011 on a year to year basis. The Center for Social Concern, a catholic linked NGO, also reported a rise in cost of living, especially in the four main urban centres. Authorities contend an overvalued Malawi kwacha is necessary, and argue against a devaluation on the basis that it will hurt the over-taxed poor people through high prices. I disagree, simply because prices are still rising and the low wages, for the few that have a paid job, are very much static. How much do you pay for sugar, bus fare, fuel, cooking oil and bread now compared to same period last year? Would a strong kwacha really contain inflation? Recently chiefs have been paraded in public to support the government’s premise that a devaluation will hurt poor Malawians. I assume the poor in this country can be easily identified because most of us barely survive. Job or not. Its effect is a rise in prices, so goes the argument to justify the strong kwacha. One question we should all ask is: why are prices rising when the kwacha remains “very strong” against all major trading currencies ? A weak Malawi kwacha easily buys US dollars or South African Rands on the street. The stronger Malawi kwacha fails to do so in our commercial banks. Which Malawi kwacha is real in this case or trust-worthy in terms of value? I leave it to you. We know that businesses have continuously adjusted their prices in light of high inflation amid doubts over official numbers, a common trend by businesses everywhere in the world. It appears a “strong” or “artificially strong” currency does not guarantee low inflation rates, and the devaluation fallacy should be re-looked, the economics corrected and the average person told the truth. At least, this is a reality in our “God fearing” Malawi.Take a case of a policy with any of the insurance companies. The upward adjustments in premiums due to inflation are being felt by individuals and businesses, thereby adding to more hardships. While insurance premiums might considered a “domain of the rich” think of the wrangles going on between minibus operators, insurance and the jitters it sends with possible fare hikes. Minibus owners fights with insurance companies is indeed classic example of high inflation at the moment minus the usual insurance risk. And then if you are junk of online chats such as “facebook”, it is clear people are wondering why prices of certain products are rising over fifty percent or even doubling. The price of a 5 litre Kazinga cooking oil now costs MK2500, from MK1300 a year ago. This is all happening when the Malawi Kwacha is still very “strong” and authorities want to maintain the status quo for the sake of “not hurting the poor with high prices”. But prices are rising and the supposedly poor people being protected by the anti- devaluation are feeling the pinch. Factor in a heap of taxes that Malawians are paying. What do you get? We all cannot turn to religion and expect divine solutions. Someone must take responsibility and leadership to deal with the worsening economic situation.So why not devalue the Malawi Kwacha? At least we are already living a reality of high prices. The earlier, the better. If the fear of high prices is real, the government of Malawi through its regulatory authorities such as the Reserve Bank of Malawi must make it easier for businesses or individuals to easily access foreign exchange and remove the “war type” exchange controls. Alliance Capital Limited in its lastly weekly money market commentary for February 2012 notes that the parallel market has blossomed to the extent that many companies are using it and I quote “It is no wonder that, unofficially, every company/business is frantically trying to access forex by any means, legal or otherwise, even at exorbitant rates way above the official rates simply to avert what maybe be catastrophic conditions”. This observation is real and confirms the reality: a high Malawi kwacha will not stop prices from rising as businesses are already paying almost twice the official rates to access foreign exchange to procure inputs. If you factor in taxes and transportation costs, one can easily understand why prices are going up. Why not devalue then?Do businesses or investors trust the Malawi kwacha? Kind of a difficult question to answer but you can judge for yourself. On short-term, possibly yes. Some sort of anecdotal evidence that the kwacha has not come close to the “once mighty Zim dollar”. But I have strong reservations on the long-term if current events are anything to go by. Investors are not taking a long-term view of our Malawi kwacha until issues of overvaluation are courageously addressed by authorities. For instance, Treasury bills, a short term instrument, on February 23, 2012 were oversubscribed by MK8billion. Authorities were only looking for MK1.23billion. On the other hand, the authorities have not been able to raise enough money through issuing long-term instruments despite higher rates. Why is this so? It could be a pointer that everyone is taking a short-term view of investing in Malawi kwacha instruments. Not a very good scenario for business confidence. Recently Ethiopian airlines announced that they no longer accept bookings in Malawi kwacha citing the tough exchange controls in Malawi and the consequent inability to remit their proceeds to Addis Ababa. They have accordingly reduced their flights or intend to do so. Whatever the reasons, both scenarios in my opinion reflect an increasingly loss of confidence in the Malawi Kwacha as a trading currency. The high market premiums on the street tell a clear story. Why authorities cannot act decisively is amazing. Nonetheless prices are rising and the strong Malawi kwacha, coupled with exchange controls is bringing a lot of inflationary pressures. At the same-time “informal street banks” dealing in forex are fast becoming a norm albeit with higher rates, but fortunately market determined. In short, I hold the opinion, that attempts to mobilize chiefs and other pundits to argue a case against devaluation on the premise of expected high prices is not only flawed but ill-informed. Prices are rising at much faster rate because a sizeable number of imports are being financed by forex obtained from the street. The street rates reflect the true value of the Malawi Kwacha. Clinging to a strong kwacha is not stopping a rise in prices. If you disagree, how much more do you pay for your loaf of bread now than a year ago?

Vacational QUOTA

Not the pieces that you scribe after a heavy meal. Contending with the reality of life, one is tempted to think what it really means. I have no habit of confusing anyone, no matter how youthful the minds, lest I have a dose of modern day “hemlock”. Socrates had a fair share of it and its consequences no different from the fatal “mzakaka” in Du Chisiza’s Kabuha tragedy. If ever, science was rocket enough or vice versa, I wonder what would happen, as I lay in my casket, or anything that assumes a similar task would do. No cremation. I am made of aluminium.

Would science invent the theory of death, let alone infinitely promote life? Not the matter of this piece, but I mean to say, we are all Malawians, and our traditions and culture far exceed religion and atheism. That we respect the dead, fear their bodies, feast over funerals and dumped dead bodies at uncomprimising employers, who at their own peril, and sometimes under profiteering mentalities, ignore their unchallengeable non-existent obligations at least from employee contracts . Ironically, their exist some close resemblance to totalitarianism no matter how individual contempt is held for the dead.
Imagine the eulogies, praises and many good things that we say about the dead. But this is where I hold funeral directors and their accomplices in huge democratic contempt. And that is where, we need some rocket science to answer certain questions. I am not looking for a preacher.

It is in the same vein that I believe death is not democratic or to say it better, the rights of the dead are not respected at all. To what extent do constitutions protect the dead? Were the rights, for instance of SS Ng’oma at Mzokoto ever respected? What about Kamuzu Banda? It is not within Hobbes’s or Locke’s social contract of a passionate man that counts, but the Napoleon politics play part as well. It is within my right as a dead person to be given a chance to challenge the hypocrisy of the living world. I don’t want some dude calling me irreplaceable at my office or something similar or akin to some “goody boy” when infact, I had so many warnings, habitual absenteeism, office sex maniac, internet addict plus facebook during working hours, and let alone denied an opportunity for promotion on account of a “wrong district” of origin. That is why I feel the whole funeral process needs the attention of the Anti Corruption Bureau...I can see an abuse of the “funeral office process” or something similar depending on which version of the Corrupt Practices Act. I can share mine but the key is “abuse”, and giving false testimony? Probably close to our traditional version of perjury. You would rather keep the Mkhito sedition far from it. Be careful, sedition is possible even in death depending on how penal code amendments are made these days.

It is probably why, I think,we need science to preserve the rights of all the concerned in the process of death. But more important, the rights of the dead, “the key stakeholder after all.” Would there be a funeral without anyone dying after all? Who would want someone to bear testimony on their behalf? This is tantamount to involuntary breaking of many laws including those that appear under Exodus Chapter 14 in the BIBLE including the famous 20th verse. My comprehension of the Koran is minimal but nonetheless the vices are similar, except the contentious drink. If science cannot solve the obvious rights of the dead, then what should we do? Unfortunately, its only science that can do it. This is a pathological case, which calls for no jokes synonymous with many professions and trades like mine, but rather the precision of a B-52 bomber.

If it is not possible to give the dead their rights, at least I have mine while alive. I may append some of such rights in my will. I care what you will say but you will not gonna take this from me. You risk a lawsuit right from my grave. The consequences are inter-generational. While it may depend on the day I breathe the last, I still stand for some principles that guide my life. I hate tribalism as entrenched in the UNIMA Quota plus its various variants such a EQUITABLE access to HIGHER education, the notion that some people are more equal than others including many forms of systematic social injustice. And of course, I still cherish the fact that no individual is greater than the other, and that ascription is illusionary since God created all us equal. Believer or atheist, we all enjoy the same rights and should be accorded the same rights. This is what the funeral director should say and not how many degrees I have got, or moneys I have left to be plundered.

It was just a dream. Good on you mates. MERIT IS THE WAY..SAY NO TO THE EVIL QUOTA SYSTEM.

Quota fluid vacation

The last leg of my hour long flight to Lilongwe seemed the longest segment. I wanted to get out of the Congolese airspace as quickly as I could. It gets worse when you see lots of military related equipment at Lubumbashi Airport. The whole feeling of meeting my family and hoards of friends was quite thrilling. Nothing mind boggling honestly, though some questions lingered my mind like cakes, cocooned and baked in some unknown oven. We landed perfectly, and soon I swung into action. How do you measure excitement? I can bet with a qualitative measure, getting behind the wheel instantly after thirty plus hours of flying. My first ugly experience were the mile plus fuel queues that could make the giant anaconda gapping in confusion. It had good face though, particularly being a meeting place for old folks. I had lost phone contacts of old pals. Fuel stations provided the right environment. Some stories even went like folks cheated on spouses using the fuel shortage as a pretext while on a good note, some marriages have been scheduled later in summer. All courtesy of the fuel shortage. I may have to do a paper on the positive externalities.
Having being branded “Mr Quota” by few online friends, like England based “Kanyoli” ,owing to my persistent disdainful postings in the cyber world about the same, I was keen to talk about my contemporarily likeable issue. But I realised there was another “Mr Quota” in area 49. No qualms about it, though my mate was to the very right extreme just like some folks I met at Safari. I am moderate I think. Of course, I was looking forward to hear different views despite my obvious dislike of the system. But nonetheless, I had to show a scholarly attitude which entails listening and probably smiling at someone whose views I hysterically disagree. Ever heard a pastor preach at a funeral of guy who impregnates his daughter and refuses responsibility? Good to listen.
Whatever, happened there were some lessons learnt about mates view the Quota system. I never missed the usual Malawian humor of crafting a joke out of it. Exhausted quotas over drinks, women, and other notable vices. I need not elaborate. While it has generally been a tool perceived to disfavour the North, I realised that it is not fully accurate as it seems. To be specific, It availed to me that a substantial component of folks condemn quota in its entirety citing various reasons. One of them, being a tool to divert attention from pressing problems that Malawi is currently facing. Need I mention? Someone, after a few beers said the country was not in a crisis though he couldn’t fuel his battered sedan.
The interesting side was to see blind arguments in support of this policy on pure spatial grounds without any recourse to a holistic positivism for Malawi. And of course, finding myself amongst mates who oppose it for similar reasons. To coin it all, I learnt that this policy, has made it difficult for those of us who rose above tribal affiliations soon after the stone age. It nonetheless, has succeeded to divide Malawians, particularly those that have always used short cuts to get things done. Nonetheless, I marvel that the fabric of our society remains progressive since 1994 and come a few years, the average person will continue to pump sense in egocentric individuals that lead often lead us. A generational change is moving in slowly but as they say ‘big men never let things get out easily”
I may probably have to de-clutter this piece, but fall short to admit the fact, it was intented to be. Otherwise quota will not solve the problems as evidenced by the recent blame game. Malawi is beautiful and bigger than any individual.
Adieu my friends. Some I met some I didn’t but they are my friends. I love you all!

The QUOTA fallacy and access to high education in Malawi

President WA Mutharika has come out in the open and expressed the view that a quota system is necessary for selecting students into the University including other public training institutions. He argues that the current system favours the Northern region and it is causing discontent in the other regions. Bingu argues further that statistics show that civil service is dominated by people from the North particularly the so called super scale positions. This has caused a serious debate in various fora. I disagree with the president and I reckon his thoughts are simply matters of opinion and not fact because there are lots of factual errors. The key issue, again in my opinion is that there is a structural problem with education policy and the quota solution is no different from the “ARVs” that deal with opportunistic infections! We need a remedy not something that is nothing but dealing with a symptom.

For example, if the president was economic with the truth, he could have gone to look at the number of principal secretaries in the civil service, or chief executives in parastatals or even our senior diplomats. He could also have shown how the so called discontent is being expressed. Who is expressing the discontent? In what manner has it been shown? I feel this is illusionary and does not reflect the mind of an average Malawian. The quota has rekindled the tribal instincts and hatred associated with the Kamuzu era that Malawians gallantly fought against. Following this debate, unfortunately, it come to be a North against the rest of the country, is a sad development for Malawi in the 21 st Century. The May 2009 elections gave us a big opportunity to demystify the regional pattern of voting and it’s an opportunity that the President should help unify our country. Some scholarly articles by the World Bank Economist like Easterly and Levine show ample evidence that countries within Africa with huge ethnic fragmentation often experience low levels of economic development. Ethnic fragmentation often leads to development choices that do not reflect the general public good but unjustified expensive policy decisions that cater a favoured constituency.

Bingu has shown his leadership credentials by defying the IMF and World wisdom of fiscal restraint by embarking on massive agriculture subsidy. I don’t care who is responsible for it. I am just being mindful of JZU claiming the same but I look at the results. Favourable weather plus affordable fertilisers have made Malawi food sufficient and exporter. Bingu argued that Bakili Muluzi’s starter park was not enough. Bingu has put in place such as sound policy that has seen the country enjoy food self sufficiency plus many international accolades on the green revolution. But this story is enough and I think he can use the same logic to apply on education. Which donor would go against him and Malawi per se if we went “green revolution on education’? The quota is just a quick fix whose costs are huge given the ethnic interpretation and the basis that the president, inadvertently exposed in his expression.

What would do if was Bingu to be consistent with agricultural policy? Firstly I would realise that Malawi gave me a mandate to rule overwhelmingly and therefore pursue policies that are in the benefits of the entire nation. I would also realise that it is difficult to ascertain someons' district of origin in 2009 Malawi where intermarriages are rampant. I would take full cognisance of the fact the ministry of education pursued a policy of district of residence given the integrated nature of our society in the modern time. Similarly, I would realise that urban schools are more favoured that the rural ones. Consequently I would embark on a big “green revolution” in education. This would see government build more Universities, if not expand capacity of the existing ones. It would also expand the capacity of technical colleges and allied institutions that can accommodate our youth who cannot make it into the University. This would be complemented by an attractive remuneration regime that is conducive to retaining qualified staff with special privileges to those that work in the rural areas.

Consequently, I would swallow some pride and realise that the “quota” and its variant as in the so called equity access to high learning, is a fire fighting technique in a country whose constitution condemns discrimination of any form (section 20) and guarantees the right to education by all citizens as in section 21. The framers went on board to craft our supreme law to ensure fairness and justice and the “quota” theory stands in sharp contrast to what citizens of this country decided long time ago. It’s not too late to rethink