“Indecision and delays
are the parents
So President Mutharika has decided to govern in a piece-meal manner – dropping one minister here, adding another nine there, then taking a break to marry a long time confidante and then starting all over again?
And yet Capital Hill and Parliament desperately need direction to solve the myriad problems currently besetting the nation. During the campaign the DPP never seemed in any doubt that victory was theirs for the taking. In such a situation one would think the party would have a shadow cabinet ready to roll into action hours after its president was sworn in.
Of course Peter has never exuded any traits of a guy in a hurry. He delayed unveiling his children – and their step mother!
But I am not sure if this dilly-dallying has always served him well, it certainly did not work to his advantage when he delayed showing leadership in the protracted academic freedom saga in his other life as Minister of Education.
But I guess the challenges facing the country will not have enough patience for such indecisiveness. President Mutharika is a ‘crisis time’ leader who must hit the ground running. Many a commentator has said Peter does not have the luxury of time; there certainly will not be any honeymoon for him.
But, while the nation is impatient for some action, its leader wants to take it one step at a time?
While we wait until he gives us his full cabinet so that we can muckrake it better, let me interrogate one of his campaign promises. Peter and his running mate Saulos Chilima said, while continuing with the very expensive Farm Input Subsidy Programme (Fisp), the in-coming DPP-government will saddle the economy with yet another potentially expensive ‘building materials’ subsidy programme.
The blue-print of the new programme states that government will subsidise cement and iron sheets so that the targeted poor will be able to afford to construct affordable houses. (Never mind that the ‘targeted’ bit is coming in now; during the campaign it sounded like universal subsidy on building materials.)
For starters, I am not sure how this new subsidy programme will not be a flop like its Fisp cousin. Look, despite pumping billions in Fisp, government still has to feed millions of hungry Malawians every year.
In fact it will be cheaper to offer relief food to the perennial hungry section of the society than wasting billions on Fisp. It is like licking ice cream in the open in the heat of Nsanje. You will keep on buying more ice cream and it will keep on melting before you finish it until your pockets are empty but you will still remain thirsty.
That is why I agree with MCP president Lazarus Chakwera who advised the Mutharika administration that, other than creating more subsidies, government will do well to devise policies that will make commodities affordable for all.
This is do-able. I will give you an example from Ethiopia.
If you visit Addis Ababa today you will discover a city under construction, re-construction if you like. Almost all buildings, from Bole International Airport right into the heart of the city, are under scaffolding.
The construction industry is booming. Why?
A story is told that after he made his billions, the late Prime Minister Meles Zenawi called the Ethiopia-born Saudi billionaire Mohammed Al Amoudi and said to him: “You got to do something for your country.”
Al Amoudi’s mother is Ethiopian while his father is of Yemeni extraction.
So Al Amoudi pumped billions in a cement company in Ethiopia. He initially invested 59 billion birr (US $3.4 billion) in seven industrial projects spread over a period of five years. Derba Group, an amalgam of three Ethiopian companies owned by Al Amoudi, is executing the project.
Derba Midroc Cement, Ethiopia’s largest cement factory located 70 kilometres northwest of Addis Ababa, was billed to provide an estimated quarter of national cement capacity in Africa’s fourth largest economy, according to Bloomberg.
Not to bore you with facts and figures, the company is set to be producing 8,000 metric tonnes of cement per day at full capacity.
Of course he will recoup his investment from exports but Al Amoudi made a policy decision that whatever cement he will sell locally must be at rock bottom price.
This has spurred the construction industry all over Ethiopia.
So, you see, instead of thinking of government subsidising cement and iron sheets, why does the Malawi government not entice people like Al Amoudi or indeed local billionaires to invest in massive production of cement and iron sheets and create conditions that will enable them to sell locally at affordable prices?
Only then will anybody who wants to venture into construction be able to do so. In fact rental in urban areas will drastically come down for a lot of people will build houses.
But, like in Fisp, subsidising cement and iron sheets will be like subsidising consumption, if you get my drift. In fact, the intended beneficiaries of the programme will not benefit in the end. Just like in Fisp, the targeted poorest of the poor will not afford the subsidised cement and iron sheets however low the prices will be.
The well off will be distributing money among the targeted poor to buy the building materials on their behalf.
If you think I am lying, just go to a random village and check how many people failed to raise the ridiculous K500 for the subsidised 50 kilogramme bag of fertiliser.