Rough Waters Ahead for Malawi: Economic Expert Warns of Dangers

By Thula Chisamba

As the Malawian economy continues to stagger, local economic expert Desmond Phiri says the situation may worsen if the World Health Organization (WHO) succeeds in banning the growing of tobacco: the country’s green gold.

In an exclusive interview with The Malawi Star, Phiri maintained that things could deteriorate quickly.

“Our government is still clinging to tobacco. Anything can happen and if we are not preparing ahead, let’s expect another woes,” said Phiri.

The WHO is currently advocating a complete ban on tobacco due to the numerous proven health risks, including emphysema, lung cancer, heart attacks and aneurysms attributed to smoking.

For Malawi, this poses a unique problem, as tobacco is the only viable export that the nation has and one of the only sources of foreign currency.

A ban on tobacco production would essentially put Malawi in the position of being a strictly import-nation, with no viable exports.

“The only solution is diversifying our economy by finding other alternatives which can replace tobacco. Its been long time depending on the leaf, let’s change ahead of their ban which will likely succeed,” added Phiri.

As if that was not enough, Phiri cited that tobacco farmers are also discouraged owing to the poor prices they’re seeing recently for what they do produce. He predicted that most farmers may not grow tobacco in the coming years.

This is happening at a time the country has lost the trust of its donor partners, who previously contributed about 40 percent to the annual national budget.

Economic experts warn that if tobacco production ends and foreign currency inflows then cease, it will drastically devalue the Kwacha leading to heightened inflation at a time when Malawi’s economy is most fragile.

“Malawians may face the hiking of goods like during the second term of Bingu wa Mutharika, when prices of goods were just going up carelessly. I tell you poor people may become more poor, ” said Phiri.

However, Minister of Finance and Economic Planning, Goodall Gondwe challenged that nothing bad will happen to the economy, citing that government has put in place numerous ways in readiness of whatever stumbling block.

Gondwe also said he doubted if the WHO will succeed with calls to ban the growing of tobacco, saying the country has joined a group of five countries which are against the move.

“Malawians must not fear the unknown dangers. Nothing like that may happen. Remember we are fighting against the move so nothing will happen,” he said.

Gondwe could not elaborate on any of the “numerous ways” Government is preparing for this “stumbling block,” as he called it.  He also could not explain how they were specifically fighting against the move.

According to Phiri, Malawians are right to be concerned; they are right to fear.  These are not unknown concerns and they are more than just stumbling blocks.

These are serious challenges facing the economy and the financial stability of the nation.  Meanwhile, Government continues to stall and to use the same rhetoric to counter ever challenge.

For the average citizen who is struggling to eat from day to day, these empty promises by Mutharika and his Ministers have begun to ring hollow and to fall on deaf ears.

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5 Comments on Rough Waters Ahead for Malawi: Economic Expert Warns of Dangers

  1. God will prove economic expert wrong, more discoveries on minerals underneath Malawian soils, God will make a way for Malawians, who can trust on economic theories? we all put our trust in God things will be more than alright than relying on cancer prone products

  2. Over 90% of the money for buying hospital medicines used to come from tobacco proceeds in those days and years. If the situation is still the same, as a country we seriously need to go for alternatives e.g. serious legume production, rice, cotton etc of late I have seen alot of pigeon peas being introduced in the north which is a commendable development.

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