An Increase in the Civil Servants’ Salaries & more – 23rd Nov 2023

Muli bwanji from BA! This is the Rorshok Malawi Update from the 23rd of November twenty twenty-three A quick summary of what's going down in Malawi.

The Parliament started meeting last Monday for the twenty twenty-three/twenty twenty-four Mid-Year Budget Review. On Monday the 20th, Simplex Chithyola Banda, the Finance Minister, announced that they had increased civil servants’ monthly salaries and wages by 10%. Banda thinks this will help them deal with the recent 44% Kwacha devaluation, but the increase was put into question. The raise might have made things worse because some civil servants may be taxed more if they enter new tax brackets.

During the Parliamentary Meeting, Banda said the salaries of civil servants have gone up by eighty billion Kwacha, about forty-eight million dollars, from 900 billion Kwacha, or over 530 million dollars.

Unfortunately, the Kwacha may continue to depreciate. In fact, there are rumors that it took another dive this week by somewhere between twelve to sixteen percent. Even though fiscal authorities are yet to comment on the matter, the Reserve Bank has already announced a plan to move towards a floating of the Kwacha—letting the market define the value of the local currency.

Some people said they have noticed fluctuating prices of goods.

The dollar is selling at a slightly higher rate than the Reserve Bank’s confirmed rate of 1,700 in some forex bureaus.

Recall that, after devaluing the Kwacha, the Reserve Bank said authorized dealer banks, which can buy and sell forex, “are permitted to freely negotiate exchange rates to trade with the clients and amongst themselves, notwithstanding any limitations previously in place.”

Meanwhile, the Reserve Bank said they are contemplating whether to introduce a ten thousand Kwacha bank note. Currently, Malawi’s biggest note is five thousand, and its smallest is twenty. For context, with 5,000 Kwacha locals can buy a packet of sugar, and with twenty, they can buy a very cheap piece of candy.

On Monday the 20th, Mark Lungu, an Economist employed at the Central Bank, told local media that they have strategies to assess the viability of new banknotes and when and how to introduce them on the market. He did not reveal what those strategies are, but did confirm that the devaluation is a huge contributor to their assessment.

There are whispers of a possible uproar by locals due to the rising prices of commodities, and the government is looking the other way and not trying to prevent it.

Demonstrations are brewing as, on Monday the 21st, angry vendors in Limbe stoned a police vehicle that tried to take their goods away. When vendors sell outside of their allocated premises, such as the local market, the police confiscate their goods and may arrest the vendors, too. But this time, it took a quick and very wrong turn when people started booing at the vehicle and throwing stones at it.

On Wednesday the 22nd, some people in Blantyre held anti-government demonstrations, but as early as 7 AM, the army and police officers were ready to keep the city’s order intact.

However, not many people showed up to the demonstrations. Many believe it’s because political activist Bon Kalindo was the head of the protests, and some locals have lost hope in him. Even though they share in the "anti-government" anger, they don't think he should be the one leading the demonstrations.

Kalindo was at the forefront of the twenty twenty-one anti-government protests against the Democratic Progressive Party’s rule, but rumor has it that he got “paid off” by the current government, which makes him a sellout.

Nonetheless, Kalindo is demanding President Chakwera’s resignation for not fulfilling his campaign promises, such as the creation of one million jobs.

On Thursday the 23rd, Kalindo took the demonstrations to Zomba city. Although vehicles with speakers spent the previous night announcing the demonstrations, less than a hundred people gathered at Zomba Stadium the next morning. However, by midday, more people had shown up and were causing trouble.

Some of them closed off major roads like the one leading to Liwonde district, leaving some motorists stranded.

Though catastrophic, it is easy to understand why so many people are frustrated. For instance, NICO General Insurance company said their client’s property is now likely underinsured because of the devaluation. So if something happens to your property and they need to replace or reinstate it, they might not settle your claim in full.

According to their statement, released on Thursday the 23rd, inflation has increased the cost of replacing or reinstating property, since prices of equipment, raw materials, and other items have surged because of the devaluation.

They have asked all their insured property owners to reassess their assets' valuation and update their insurance policies accordingly.

Locals are not the only ones tired of the country’s economic situation.

South African Airways (or SAA) has suspended all its Malawi services, barely a few days after suspending its local ticket sales. Now, there won’t be any SAA flights from Blantyre or Lilongwe to South Africa or vice versa starting Thursday, the 30th of November.

According to a statement SAA released on Tuesday the 21st, Malawi’s economic challenges, such as the Kwacha devaluation, forex shortages, and the resulting blocked funds, have prompted the move.

Nonetheless, since the IMF granted Malawi a multi-million dollar credit facility, more international organizations have stepped in to help, too. The most recent is the World Bank, which approved a sixty million dollar facility through an International Development Association grant to ease imports for essential commodities like medicine and fertilizers and support the country’s economic recovery.

Local news said the Reserve Bank asked the World Bank to act as a guarantor to help local firms import essential items, hence the grant approval.

In a statement by World Bank dated Monday the 20th, Hugh Riddell, World Bank Country Director, said this grant would help restore “the long-term functioning of markets.”

You might lose track of your favorite radio stations.

On Thursday, the 23rd, the Malawi Communications Regulatory Authority (or MACRA) announced that they had finalized their re-farming frequency brand exercise. This is an activity they undertook a few months ago to assign new frequencies to radio stations and reduce the congestion of frequencies, which led to the interference of radio stations.

Daud Suleman, the MACRA Director General, said the exercise has given them plenty of new frequencies that they can distribute to new radio stations for years to come. He urged local radio stations to use the remaining weeks to tell their listeners about their new frequencies, which will become active next January.

Human rights advocates, religious leaders, and traditional leaders have been lobbying for parliamentarians to introduce a bill that abolishes the death penalty. For instance, Archbishop George Desmond Tambala, President of the Episcopal Conference of Malawi, argues that judgments aren’t always right and death penalties cannot be reversed.

The issue of the abolition of the death penalty dates back to nineteen ninety-four, but it remains unsolved. The law hands out death sentences, but it has been a while since it was actually implemented. For instance, there were twenty-six convicts on death row in twenty twenty-two, but President Chakwera commuted their sentences to life imprisonment sentences instead.

Malawi’s fashion scene is making international headlines.

Over the weekend, Aurance Sahiba Lwanda, a local fashion designer, won the Emerging Fashion Designer Award at the sixth Africa Fashion Awards in Nigeria. Her brand, AR Couture, is known for its African print clothing, also known as Ankara clothing, footwear, and accessories.

In our last bit of news, two unknown men are trending for their acoustic rendition of two very popular and currently trending songs. The two performed acoustic versions of the Popo song by local artist Driemo, and a piece called Kondwa from Zambian artist Yo Maps. Their video has received over a hundred thousand views.

We have the link for you in our show notes.

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Pitani bwino!