How COVID-19 is likely to slow down a decade of youth development in Africa

How COVID-19 is likely to slow down a decade of youth development in Africa

Unemployed Liberian young men seeking daily jobs at the industrial district of Bushrod Island, Monrovia, Liberia. EFE-EPA/Ahmed Jallanzo

Wim Naudé, University College Cork

Until COVID-19 hit, the quality of life of youth (age 15-24) in sub-Saharan Africa had been steadily improving. According to the World Bank, by 2019 the youth literacy rate stood at 73%. Gross secondary school enrolment rates increased from 13 % in 1971 to 43 % by 2018. Youth unemployment rates have remained fairly stable, at around 9%, even below the world average of 13.6%.

Across sub-Saharan Africa, extreme poverty among young workers declined from 60% in 1999 to 42% in 2019. Moreover, the youth literacy gender parity index, measuring the ratio of females to males ages 15-24 who can both read and write, has improved significantly, reaching 93% in 2019. And for this first time, the unemployment rate of young women are similar to that of young men (9.4%).

As an economist interested in entrepreneurship and technological innovation, I recently contributed to UN’s 2020 World Youth Report. In particular, chapter 4 of the report concerns how the youth can leverage new digital technologies for social entrepreneurship to advance sustainable development. Though written before the COVID-19 pandemic, the message may have become even more urgent. This, because COVID-19 may slow down or even reverse the positive trends in youth development noted.

There are fears that the pandemic will result in a lockdown generation, characterised by structurally higher youth poverty and unemployment.

Lockdowns, by slowing down the spread of the disease, generate benefits that “accrue disproportionately to older households”. But, the costs of reduced economic activity are disproportionately born by younger households. They bear the “brunt of lower employment”.

Reinforcing inequalities

Younger people, especially young women, are more intensively employed in sectors such as hospitality and entertainment. About 80% of youth jobs in sub-Saharan Africa are in the informal sector. These sectors – hospitality, entertainment and informal – have been among the worst affected.

Lockdowns also interrupt schooling and education. In one calculation, this could generate global future “learning losses with a present value of $10 trillion”.

The closure of schools will reinforce social and economic inequalities and exclusion. Youth from more well-off households may be less affected, for instance in having access to private internet and laptops.

While these impacts are troubling everywhere, in Africa they are magnified due to the high rate (21%) of youths who were already not in employment, education or training before the pandemic struck. The 8th sustainable development goal requires of all countries that, by 2020, they substantially reduce this rate.

Given the complications introduced by the pandemic, how can this development goal be best achieved?

Youth entrepreneurship

With formal employment growth sluggish at the best, countries are pinning their hopes on entrepreneurship. But, entrepreneurship support policy remains a notoriously complex topic. This is especially true when it comes to young people.

Younger entrepreneurs are on average more likely to fail, and older entrepreneurs’ firms on average perform better. This is often due to market failures. Banks do not have information about the quality of younger entrepreneurs (who often lack collateral). In education, meanwhile, the market will under-supply in the absence of subsidies.

Where these market failures are prevalent, the youth may fail to obtain finance for their ventures or accumulate enough skills. Supporting youth entrepreneurship would, therefore, require not policies to focus exclusively on entrepreneurship per se, but to fix market failures elsewhere in the system.

The benefits of catalysing youth entrepreneurship could be huge in Africa. With the world’s youngest population at a time of unprecedented innovations in digital technologies across the world, the African continent has a unique opportunity. It has two key advantages: digital savvy and a willingness to take risks.

Young people may have a comparative advantage in adopting and using new digital technologies. Moreover, many African countries have not only leapfrogged in the adoption of mobile communication tech, but have been experiencing an upsurge in tech entrepreneurship.

There is a deep underlying entrepreneurial reservoir in Africa. As much as 80% of youth labour market participation is in household enterprises or as self-employed activities; only 20% in standard wage employment.

Digital entrepreneurial ecosystems

Youthfulness itself should not be a serious liability for entrepreneurship anymore.

Given the scarcity of resources on the continent, turning potential into reality and best addressing the market failures mentioned will require countries to prioritise investment in, and regulation of, their digital entrepreneurial ecosystems.

It will require redoubling efforts to expand access to new digital technology and infrastructure, including the data needed on which to build new products and services. It will also require investing in information and communications technology skills – fixing market failures in provision of public goods and education.

Increasing digital absorption in this way will pay good dividends. As I argued in chapter 4 of the UN’s 2020 World Youth Report: consider for instance, that countries that do better to absorb digital technologies also tend to have a lower share of youths not in employment, education or training.

The direction of causality between digital adoption and utilisation of the youth is likely bi-directional. Better adoption of digital technologies is likely to engage the youth in either learning, education or employment. Better engagement of the youth is likely to lead to faster adoption of digital technologies – propelling a virtuous cycle.

With the COVID-19 pandemic threatening to halt a decade of progress in youth development in Africa, at a minimum a three-pronged approach is now urgent. This entails bridging the digital divide; investing more in youth education in information and communications technology and science, engineering and mathematics fields. It also requires building digital entrepreneurial ecosystems.

Wim Naudé, Professor of Economics, University College Cork

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Which African leaders will truly emulate the achievements of John Pombe Magufuli?

Presidents John Pombe Joseph Magufuli of Tanzania, 1959 – 2021.

Since his passing, quite a lot has been said about the life and works of Tanzania’s recently deceased president. And by most fair and sincere accounts, John Magufuli did have a tangible, measurable, commendable and signficant impact on Tanzania, taking the country along an admirable trajectory from a low income country up to the point Tanzania is now firmly considered to be a middle income country.

And most Tanzanians loved him for it.

And yet across Africa, although such success stories inspire millions and should in theory be common – they don’t happen very often, owing to a long list of failures, among them poor and uninspired leadership.

But if John Magufuli – who it must be said didn’t come from some grand or otherwise priviledged background that gave him special advantages – can achieve what he did in as short a space of time as 6 years, why can’t other African leaders do the same?

Power & Status

It is no secret that many leaders in Africa are drawn to political leadership for other reasons. They are not overly concerned about the problems their countries face, or the poverty and hardship. The overriding intention is not so much to provide good and transformative leadership in the way Magufuli did, instead a worrying number of African leaders are more bothered about power and status, leaving a leadership void in those countries, and consequently affecting the scale and pace of development.

These are the people who like to attend heads of state meetings of SADC, UN, AU, ECOWAS, etc. complete with stays in pricey hotels; they like to have smarmy business executives of dodgy companies attend state house to meet them – because it can be spun into an investment story; they love to be seen on the front covers of newspapers, to be interviewed by the likes of Al Jazeera, CNN or France 24 – making all sorts of grandiose promises, which years later, can’t be backed by any tangible achievements; they love to have the doors of their Mercedes Benz limousines opened by well dressed, neatly-shaven and altogether reverent bodyguards – who make them appear more important than they actually are; they like to attend every insignificant function that comes along, where they can be seen to be doing something or to please supporters – even when the impact of such functions on a national level is negligible and a single junior minister could have been dispatched to it. Increasing the salaries of top military officials or the trip to the UN General Assembly means more to such leaders than funding the education and welfare of poor kids in their countries’ ghettos; they like to see a band of protocol-obsessive allowance-seeking hand-clapping minions nod approvingly at everything they say, flanking them at press conferences, worshipping them on social media, inflating the sizes of their convoys, and generally putting out a false and deceptive apperance of competence and authority. For these kind of leaders, a picture taken with Barack Obama at the White House or with Bill Clinton or Richard Branson at some international conference means more than actually getting down to the hard work of resolving the youth unemployment crises in their own countries. They will talk endlessly of courting investors and trying to attract investment at these high level international gatherings, but years on – absolutely nothing comes out of it.

That love of glamour and status is more about pomp (the same english word where pomposity comes from) and let’s be absolutely clear when we say it is not leadership, and is exactly the kind of excess leaders like John Magafuli, Thomas Sankara, Patrice Lumumba and even Julius Nyerere would despise.

Centralisation

It doesn’t matter how talented, knowledgeable and practical you think you are, you can’t adequately cater to the needs of millions of people on your own. Even if everyone within your cabinet was churning out tons of raw productivity, even if everyone in the ministries was ontop of their work, even if all government departments were working with superhuman efficiency and at 100% capacity, it’s still not enough to adequately cater for everyone’s needs from good healthcare and housing to employment and skills development, if things remain centralised.

Centralisation is a progress killer in African countries because everyone expects the president, the minister, the technocrats, the guy at the top to sort out everything for everybody. But the guy at the top doesn’t have superhuman powers to do justice to all the needs and requirements of the people he/ she leads or is supposed to represent. And his/ her priorities often are not the same as the priorities of the people in need.

If the impact of our Governments across the African continent is to be revolutionised, if we are to achieve more tangible things in less time, we need to begin to think beyond one man or woman being the person who authorises and pushes through some project or another to completion.

We need to democratise development to the point where we openly and unreservedly bring into the equation those people (or groups) whose lives are affected by governance failings, or under-service that’s not been prioritised, and empower them to be able to make a real difference in their circumstances, be it allowing them to organise themselves, to raise money, buy equipment, or build the infrastructure they need etc. without having to constantly seek authorisation from the central government.

In Malawi it means projects like the Neno road, a new international airport in Mzuzu, the new hospital promised to Michinji, and the Kapiri-Mkanda road among a long list of project promises should be treated as urgent infrastructure projects, and should be escalated, and a stringent implementation schedule set.

District officers and communities involved should be tasked with a new implementation schedule, provided funding that’s closely monitored, and subjected to regular monthly audits to strictly enforce the implementation schedule. They should also be free to solicit their own funding to add to that effort, and any failures, unexplained mishaps or delays should have serious consequences for all involved. That is the kind of thing John Magufuli would be proud of, and we’ve all seen the videos of his similar hard-hitting approach.

The way we fund, monitor and roll out major projects, and the implementation timelines need to be changed fundamentally, for projects to start being executed timely, and for them to be completed on budget.

Party allegiance vs allegiance to the country & the constitution

President Chakwera in Malawis Parliament

One of the qualities which is common in transformative leaders is that they are not afraid of stating the truth and offending powerful people.

In some cases this can be a negative quality and can lead to a leader’s downfall, but in most cases it is a good and necessary quality to have because a great leader needs to have a strong spine. He or she needs to be able to say No, when the situation calls for it. This is important since not everyone who will try and approach or influence an African President (however dignified the title of the influencer is, or however laundered the reputation of their organisation may appear) does so from a good or sincere place. Simply put, not everyone who talks to an African President has noble intentions.

Unfortunately there are so many examples of African leaders capitulating or giving into bad ideas, bad or exploitative deals when pressured, when they should infact have stood their ground firmly and said No.

Now here, I’m not talking about issues like COVID-19 and the COVID-19 vaccines which scientifically have near global consensus on how to manage and deal with, in order to stem the spread of the pandemic.

What I mean is if a leader knows or has been made aware of the toxic influence or otherwise corrupt nature of say one or more of his own ministers or officials; he / she must act, and crack hard to decisively rectify that anomally. Even if individuals in his / her own party thinks the scandal should be ignored.

Similarly, a great leader who wants the best for his people should not allow his country to be heavily indebted to other countries or to international institutions. And if they find the debt when they get into office, they need to aggressively devise as a matter of urgency a workable, practical and stringent plan of managing and paying off the debt.

Old thinking vs 21st Century thinking

Employees at WhatsApp HQ

This fundamentally is about new wine and old wineskins.

The world is not what it was 40 or 50 years ago. While a Nelson Mandela, or a Kamuzu Banda, or a Jomo Kenyatta, or a Robert Mugabe were great and necessary needs for Africa 40 or 50 years ago, our countries at this moment have fundamentally changed and have very different needs and wants to the needs of the 60’s and 70’s; the kind of needs which cannot fully be tackled by using approaches or methods devised by African heavyweights dinosaurs.

That’s not to downplay the achievements of these great men, or to ignore the many rich lessons enshrined in their lives. Not at all. But having said that, many of them weren’t able to deal with everything properly. For example many such great leaders didn’t manage to eradicate poverty in their lifetimes, so even back then their successes had limitations.

A modern thatched house outside Lilongwe, Malawi.

Instead, our countries in Africa need leaders who understand the dynamics of the 21 Century; who ask questions such as:

what 20 practical things can we do to maximize the chances of the next WhatsApp being founded in our country?

The Africa of today needs young and dynamic leaders with vision who will pioneer projects for better connectivity, cheaper and affordable modern housing, attractive & inspired infrastructure, and well connected networks of affordable public transportation (modern trams, trains and road networks). Our countries in Africa need cheaper logistical costs for importation of desirable foreign goods, cheaper logistical costs for ease of export of the country’s processed goods without making them too expensive on international markets, State owned and run multi-billion dollar projects that will not only create thousands of jobs, but will bring forex – several of the kinds of things which we are now beginning to discover Tanzania was working towards. The list is rather long.

You can’t do that kind of thing effectively if you are still thinking of how to maintain a well-equipped secret police, or if your focus is just on winning the next election. You can’t do that if your parastatals and large public companies aren’t run by anyone under the age of 35, or when you don’t have enough women in leadership roles in such companies…

Birmingham City Library

It’s the difference between on one hand promising to build a stadium (whose long term impact on a poor country is debatable), and on the other hand working to build high quality modern libraries in each district and to bring free high speed internet to poor citizens and their children – most of whom can’t afford the often high data costs charged by private companies currently operating in African countries.

Continuing the spirit of Magafuli will require a fundamental shift in the way governance has been done in Africa for a long time. It will require true selflessness beyond party, tribal or national lines. It will mean breaking against party, regional and historic allegiances and doing what is best for everyone, not just the biggest or most powerful side. It will mean negotiating hard for the interests of the people, and not being intimidated by foreign powers or external pressure on matters of national or regional importance.

Magafulism has raised the bar extremely high for African leadership, and was well overdue. For now it remains to be seen just how many current African leaders will truly rise up to the challenge?

This is how I would deal with the Tony Blair issue

If you didn’t already know, Tony Blair (like him or not) is back in town.

The former British Prime Minister is going to be working with the government of Lazarus Chakwera to …. do something? According to the website of Blair’s Institute for Global Change, Blair and his people will be ‘ …looking to set up a new project to support the govt of Malawi to strengthen its delivery and implementation mechanisms. This is likely to include a delivery function in State House, but also support other parts of the Presidency e.g. communications, international affairs…‘ and ‘…to strengthening delivery in the Presidency, the Project will seek to strengthen connections with other key ministries such as Energy, Agriculture, Industry and Trade, and the Ministries covering infrastructure‘.

But already, some Malawians are up in arms about the news. They are not happy with what suspiciously looks like a useless intervention. Among the protestations is the allegation that when Tony Blair came to Malawi to assist Joyce Banda in 2012, when she was President of Malawi, there wasn’t much that was achieved back then, and Malawians have never been given solid evidence that his involvement at that time was beneficial to the country, despite the significant cost his involvement incurred.

There has also been the allegation that considering the long-term effects of Britain’s foreign policy when Blair was British PM – which saw the UK support the US led illegal invasion of Iraq, among other misguided military campaigns, associating with Blair now apparently tarnishes Lazarus Chakwera’s near-perfect image, and is a regression of the very idea of a new corrupt-free Malawi. The architects of this accusation essentially say that some people will be asking “Why is that small poor African nation paying a fortune to a war criminal?” to quote just one twitter user, who no doubt is not a fan of Blair.

Finally, there are those who are resentful that the West including Tony Blair did not speak up or help Malawians when the former president Peter Mutharika, to quote one complainant, “tried to rape the constitution” in stealing the 2019 election (which was over-turned because of widespread irregularities). They say it was only when Lazarus Chakwera won this year’s Election re-run and ascended to power “that they came running” to quote the same complainant.

The government of Malawi in defending the collaboration with Blair has said that those who are against his involvement are xenophobic, which if you ask me, is about as lazy a response as any tired press officer could muster in his sleep.

But putting aside the unhelpful bickering, is Blair’s version 2 foray into Malawi worth the time and money?

This is how I would deal with the issue, if it were up to me:

I think some people who are opposed to the idea of Tony Blair’s services to the government of Malawi are getting the wrong end of the stick on two distinct but important things.

Firstly, they wrongly think that Tony Blair’s involvement is an admission that we don’t have any capable Malawians able enough to to sell Malawi to the world, which ofcourse we do. This criticism says that by employing Blair we are failing to recognise or advance the talent of hundreds of Malawians who can do pretty much the same thing just as competently – which is not true. The second fallacy in all this is that advice as to developmental issues should be free, or paid for by someone else other than the country that stands to benefit from such advice. This thinking too is misguided, and if you can excuse my Chichewa: ndi maganizo wa anthu ozolowela ku vencha.

Let me explain why.

The real question here should be what is a fair price for a poor country to pay for High Level access and investment due diligence?

The reason answering that question matters, or should matter, is because there are “doors” (figuratively maybe ‘corporate doors’ is more accurate here) out there which a Finance minister/ Business Development official of Lazarus Chakwera won’t be able to open on their own, but which with just one phone call from an influential person such as Tony Blair will land a face to face meeting.

Let me give you an example: Would Felix Mlusu (Malawi’s Finance Minister) or Eisenhower Mkaka (Malawi’s Foreign Minister) be able to easily land a meeting with the head of Citigroup Michael Corbat? Or the CEO of Tesla Elon Musk? Or of Amazon’s Jeff Bezos, or say, Berkshire Hathaway’s CEO Warren Buffet, or the Chief Executive of GlaxoSmithKline Emma Walmsley, or the Chairman of Dyson Technology Sir James Dyson, or Richard Lutz the Chief Executive of Deutsche Bahn – the largest European railway operator, and second-largest transport company in the world… I could go on and on, but all these meetings being for investment talks into Malawi?

I doubt such would be as easy or straightforward for any of the ministers or trade officials in Chakwera’s government.

But I can bet you that Tony Blair probably has the direct line of at least one of these executives in his mobile phone right this very moment. I am also certain that if he doesnt have their number, he personally knows someone in his network who has their direct phone number. And that even if he didn’t personally know the executive, the mere mention that Tony Blair is on the line to any of the executives would ensure that phone call is put through.

And it would be such a simple and straightforward exercise to arrange high-level meetings between a development team from Malawi, and senior executives of those companies.

That kind of access is valuable, and it’s high time Malawians learn this undeniable fact.

Thus, I think the questions Malawians should be asking should instead be (1) What is the Return on Investment (ROI) on using the services of people like Tony Blair; and (2) Can Malawi afford it?

I think someone has to sit down and talk to Blair’s people, crunch some numbers, and then explain to the Malawian people in detail the benefit of what they (or the so called “well-wishers”) will actually be paying for, so that there is less misunderstanding regarding these kinds of issues.

Of course we need to learn the lessons from 2012, but working with Blair ought to be a case of having a solid and strong contract between Tony Blair’s Institute For Global Change and the Government of Malawi, listing 11 or 12 targets or deliverables, an execution time period, and a non-performance clause:

  1. We want a joint-venture between GlaxoSmithKline (GSK) – the large British Pharmaceutical with revenues of £33.75 Billion (2019)- and the government of Malawi, to manufacturer drugs locally in Malawi, in which the Malawian government owns 51% of the joint venture, assuming GSK invests £200 million of hard cash into the facility and the development of the local area, development of downstream industries that supply big pharma, and to employ hundreds of Malawians.
  2. We want Citigroup to open a state of the art Investment & FinTech hub in Lilongwe to lure other financial industry heavyweights, and to help our FinTech entrepreneurs and local Finance sector companies tap into international capital markets. We would like them to invest at least £80 million into the facility and make it their East Africa headquarters, giving finance jobs and training to at least 200 Malawians.
  3. We want Amazon to open an East African Headquarters in Blantyre, Malawi, and regional Logistics Hub (Warehouses and fulfilment centres) for East Africa. We would like them to commit to investing $250 million into the venture, and to employ 400 young Malawians.
  4. We want Dyson Technology to build and open a state of the art Engineering University like the one they have in the UK, to train and equip hundreds of Malawian young people with practical engineering skills.
  5. We would like Tesla to invest $1 Billion in an electric car assembly factory and automotive battery manufacturing plant that will give jobs and technical skills to hundreds of Malawians.
  6. We would like to invite Berkshire Hathaway to invest between $1 Billion and $3 Billion in two large Solar farms to be built in Malawi, with assistance from one of the companies in their investment portfolio (Berkshire Hathaway has invested at least $16 Billion in Solar and Wind, and is looking to invest more in the sectors), in a 50:50 joint venture with the Government of Malawi, so that we can solve our energy deficiency challenges.
  7. We would like two Supermarket chains from Walmart/ Sainsbury’s/ Marks & Spencers/ Cooperative Group Food Limited to partner with another two local Malawian supermarkets in a 30:30:20:20 Joint Venture to open 10 brand new supermarkets across the country and invest at least $400 million in infrastructure, job creation for hundreds of people and adoption of best practices gleaned in other markets.
  8. Can Tony Blair persuade the leaders of the construction behemoths Laing O’rourke (£2.75 Billion -2019 revenues), Kier Group (£3.42 Billion – 2019) and Balfour Beatty (£8.4 Billion -2019) to join two carefully selected African construction companies in forming a Malawian Consortium whose members collectively invest a $500 million loan into the building and fitting of a new state of the art Public Hospital in Mzuzu, the loan being repayable over 15 years at a fixed interest rate of 20%.
  9. We would like to do deals with four world-renown hotel developers / chains with a good track record, including sound employment practices, to each help build and establish a 4-star / 5 -star hotel / golf resort along the lake, one in Monkey Bay, another in Salima, a third in Nkhatabay and a final one in Karonga, all being near the lake, with the government owning 35% of each hotel/golf resort , and a veto on major decisions.
  10. Can Tony Blair’s organisation convince Heathrow Airport Holdings and the SmithGroup (who helped design Hartsfield -Jackson Atlanta International Airport – the world’s busiest airport by passenger travel since 1998), to partner with the Department of Civil Aviation to upgrade the country’s airports and invest $1 Billion for a 40% stake in Lilongwe International Airport and Chileka Airport.
  11. Similarly, we would like to do a joint venture with DHL, UPS and ParcelForce for an Air Cargo company operating weekly cargo flights from JFK International Airport, Manchester Airport, Dubai International Airport and Shanghai Pudong International Airport directly to Lilongwe International Airport, to help Malawians to cheaply import things, with the government of Malawi owning not less than 25% of the joint venture.
  12. …. Some other important investment imperatives you can think of…

if Tony Blair’s team can deliver on some all of these important investment commitments, and see through the signed contracts with these corporations, I wouldn’t have any qualms for the government of Malawi to even pay Tony Blair and his associates £5 million a year for the duration of their contract, so long as the projects above actually happen and there is Foreign Direct Investment (FDI) associated with them coming into Malawi, and clear, quantifiable, independently verifiable and unmistakable value to Malawi’s economy, as a result of Blair’s intervention.

Failing that, I would have a clause in the contract with the Institute saying that if for whatever reason the deliverables have not materialised within 10 years from commencement of the contract, then the Institute should repay Malawians 100% the full cost of the consultancy fees plus interest.

Development – even to a poor country, does not come cheaply, so let’s be pragmatic and accept the reality.

Also, let’s make another thing very clear: Just because you have dealings with a former world leader whose politics is far from palatable doesn’t necessarily mean that you agree with each and every aspect of their foreign policy.

For the longest time, Malawi had dealings with all manner of dodgy regimes like Apartheid South Africa, Portuguese East Africa (now Mozambique) and the People’s Republic of China (PROC), let alone the Mugabe’s and the Gaddafi’s of this world. These days, we are cosying up to Israel’s Netanyahu and Saudi Arabia’s MBS – who are far from faultless. But we didn’t (and don’t) necessarily endorse or agree with any of the controversial or plain wrong things which those leaders and their regimes did/do. Our alliances with them is purely business.

The Government of Malawi has introduced licence fees for the cultivation of medicinal/ industrial Cannabis, but some Malawians are unhappy

If there is one example of a country whose people are so engaged in it’s Political and Democratic process, but also so easily enraged that at the slightest whim they’ll publicly criticise any decision from their government – when such is deemed wrong or unfair, look no further than Malawi.

Recently the Tonse Alliance government of Lazarus Chakwera gazzeted cannabis licence fees for the cultivation of industrial or medicinal hemp (cultivation, storage, distribution & selling), as part of it’s commitment to implement the legalization of cannabis cultivation and processing (following a bill which Malawi’s parliament passed in February 2020), and take advantage of the huge opportunities that exist within the sector.

However the decision has sparked a huge national debate, with some Malawians complaining angrily that the fees are too high and unaffordable for the average Malawian farmer, whereas others disagree with this complaint and are saying that the fees present an opportunity for groups of farmers to work together in cooperatives, managing larger and more efficient commercial farms, instead of the archetypical small subsistence farms common in Malawi.

Among the complaints being made is also the assertion that since the fees are beyond the affordability of ordinary Malawian farmers, it will in fact be those with deep pockets and foreign investor companies who will ultimately come to dominate the market, creating another monopoly that is controlled by a select few, and which is beyond the reach of ordinary Malawians.

The government has missed an opportunity to empower farmers in the villages – some of whom have been cultivating cannabis illegally in hidden farms for years, who would have otherwise been legitimised had the licence fees been affordable.

The government has missed an opportunity to empower farmers in the villages – some of whom have been cultivating cannabis illegally in hidden farms for years, who would have otherwise been legitimised had the licence fees been affordable. – one person told me.

Sameer Suleman, chairperson of the Parliamentary committee on Agriculture, described the cannabis licence fees as a deliberate move to prevent Malawians from benefiting from hemp farming.

A Malawian tobacco farmer

It’s unfortunate that many Malawians cannot afford the licence fees for the cultivation of medicinal / herbal cannabis, but it is not surprising seeing Malawi’s weak economic standing on the global stage. It is also true that several large industries in Malawi (Rubber, Coffee, Tobacco & Sugar to name a few examples) have come to be dominated by deep-pocketed individuals or well-resourced foreign companies, some of whom demand cheap labour and low tariffs on the raw materials they export. For this reason, my sympathies lie squarely with those who are calling on the government to do more to help Malawian farmers, the great majority of whom would struggle to raise $10,000.

One way of achieving this would be a Cannabis Cultivation & Processing Loan Scheme that would be extended to a group of farmers, say a minimum of 3 farmers who get together to collectively cultivate the crop. The way it would work is that a ‘Commune‘ of 3 or more farmers would get together and register their interest for a licence with the Cannabis Regulatory Authority, including providing details of the size of the land that is to be used, it’s location(s) and what crop(s) are normally grown on it.

The government would then record these details and after a verification / inspection process, would issue the licence, stipulating that the licence cannot be transferred / sold to a party other than those to whom it has been issued; that only the farmers named in the commune can use that licence.

The farmers would then be assisted with technical know-how, training, equipment (Fencing, solar panels, irrigation equipment, etc.), or other essential inputs that are required for the optimal cultivation of the crop. All this would be part of the loan. A small collateral would probably be required, although such would need to be means-tested, in that poorer farmers should be exempt.

A Cattle auction

Once the crop is ready, an Auction House or stock exchange operating under the auspices of the Cannabis Regulatory Authority could be established that deals with marketing various grades of the crop to buyers, both local and international, both physically and online. The licensing fees (or a part thereof) for the licence issued to each commune, and other capital costs, would then be deducted at this stage, or over several years.

I believe such an approach would lessen the financial burden of raising the licence fees, and capital costs, on impoverished farmers, and would ensure that Malawians are not unfairly prejudiced by their economic circumstances.

I think this would be a better model of taking advantage of the opportunities in the sector, while not excluding Malawian farmers, however, an alternative approach could be the use of public private partnerships.

But to be fair on the government of Malawi, this sector is being seen as one way which can help them balance the country’s books. When Tobacco sales (Malawi’s largest source of export revenues) have been declining (they were down 31% recently) and the country’s economy has been negatively impacted by COVID-19, a fresh in-demand crop with established international markets presents a rare opportunity.

Our view as regulator is that if we get honest investors, the hemp industry can supplement export revenues from tobacco, and in some cases, surpass it. But it will not immediately replace tobacco” said one Boniface Kadzamira, the Board chair of the Cannabis Regulatory Authority.

So I don’t necessarily think the licence fees should be slashed by too much. As a compromise, maybe an explicit distinction needs to be made between “Private applicants” and “Corporate applicants”? Done this way, the licence fees for corporate applicants can actually be increased to say $25,000, helping subsidize the private applicants.

Malawi among other things is also famed for its recreational Cannabis sativa strain known as “Malawi Gold” , which is extremely hardy, and according to a World Bank report is among “the best and finest” marijuana strains in the world.

Creating Large State owned corporations

They have them in most developed countries, and there is no reason why Malawi shouldn’t have a few.

For example did you know that Parpública, the Portuguese behemoth founded in 2000 and with assets worth US$13 billion, and which owns Air Portugal is a state-owned enterprise?

In the quest to find alternative solutions of economic development, the very first thing our country needs, maybe besides a mindset change, is to raise significant amounts of Capital.

This can be done in a number of ways, but probably one of the best ways is by issuing Sovereign Bonds. Using Sovereign bonds can lessen the debt burden on Malawi, and prevent the country ending up in the debt mess spiral that countries like Zambia and Angola have found themselves in.

This is because aside from the fact that the government would set the terms and conditions of the Sovereign Bonds issuance, it would also allow domestic Investors to invest and would not disproportionately make the country beholden to a foreign financier, private or public.

The reason we need such Capital is to make large strategic investments into infrastructure and equipment, which with proper planning and execution can enable Malawi to manufacture certain products which our people need most (domestic market),  but also for foreign markets, and for which we have a steady and affordable supply of raw materials.

So for example, we can use such Capital to buy a refinery to manufacture Ethanol for use in the Pharmaceutical industry and in alcoholic beverages, and for use as an additive in Vehicle fuels, by expanding and starting one or two additional sugar plantations and processing plants as the ones they have in Dwangwa and Nchalo, in a similar rural area. The ethanol product can also be exported to neighbouring countries cheaply undercutting their current supply chains, but creating a new revenue stream for the Government.

The waste products from the sugar plantations (bagasse https://www.sciencedirect.com/topics/agricultural-and-biological-sciences/bagasse ) can be used as a biofuel, reducing our country’s over-reliance on firewood – which is worsening deforestation situation in Malawi, and is responsible for the numerous floods we experience almost every year.

Similarly, a large Sheet Metal Fabrication factory could be established to manufacture Iron sheets for roof houses (malata) to be used to supply hardware stores across the country.

Both the Sheet Metal Factory and the new Sugar Processing Plant would create employment for thousands of Malawians, and can be scaled intonmuch bigger operations if required. New and organised dwellings and townships can then be created around them. 

This is one way of creating large state owned corporations that can give jobs to thousands of citizens, creating employment across the country.

There would be other added benefits, such as more equitable spreading of the prosperity of the cities into the rural areas, decongesting the cities of traffic, and reducing migration to cities – as more working-age people would choose to live closer to these rural factories – where they can find jobs.

Finally, it would accelerate the provision of decent housing, water, sanitation, communications, energy and transportation infrastructure to the rural areas – factors which would contribute to the fight against poverty.

The Secret to successful state-owned enterprises is how they’re run (The Conversation)

More interesting posts at

http://malawiace.com

What does a Pro-Malawian Position on Foreign Direct Investment (FDI) into Malawi look like?

  • Listen to this article here

Last week President Chakwera took part in a webinar hosted by Invest Africa. (https://investafrica.com/event/malawi-insights-for-investors-with-his-excellency-lazarus-chakwera-president-of-the-republic-of-malawi/ ). It was a good decision that minimally should show that he is proactive in attracting Foreign Direct Investment (FDI) into Malawi. However, there are some painful lessons from the past that must be learned.

I think as far as Malawians are concerned, one of the main concerns is how the Tonse Alliances policies of President Lazarus Chakwera in regards to attracting Investors will translate into tangibles that will positively benefit and impact people’s lives.

Specifically, people will be interested to know how The Government of Malawi’s (GOM) policy on FDI will affect them in terms of employment, environmental protection and a stake in the national wealth creation, not only for the short term, but in the long –term.

Besides these concerns, Malawians will want to know what level of transparency will be established to safeguard against and prevent the corrupt practices of past administrations whereby influential party cadres illegally benefitted from contracts awarded to foreign companies via backhanders and by charging investors “access fees”.

This means that President Chakwera would be best advised to structure his policies on FDI to focus on Inclusive Prosperity for all Malawians, as has been his theme in many of his speeches, especially now that with the COVID-19 pandemic there sadly are many people who have been laid off work, and whose livelihoods have been disrupted and are uncertain.

Thus, the Tonse Alliance Government must publish its position on FDI, including deliverables and should enshrine into Law Investor Responsibilities towards the Malawian people, including how such will be monitored, and the penalties for failing to abide by such laws. This is important to give confidence to Malawians that the Tonse Alliance, unlike previous administrations is truly serious about creating shared prosperity for all Malawians.

Let us put an end to the days when an investor would come to Malawi, invest a couple of hundred thousand dollars, use low-pay Malawian labour, utilise Malawian roads, and our weak labour laws, to extract raw materials (including minerals), export those raw materials abroad, refine and add value to those exports, then sell them at a large profit to reap tens of millions of dollars from their investment – while the people of Malawi do not benefit proportionally.

I am not against investors making money, far from it. But in a poor country such as Malawi, with so much want and poverty around, the benefit to Investor versus the benefit to Malawi should be proportional and acceptable. It is not right for an investor to walk away from their investment extremely rich, but pay little or no taxes, and critically, leave behind impoverished communities that have not benefitted or been empowered beyond the token gestures (bad roads that soon disintegrate, mediocre school blocks built hurriedly with little thought, no decent hospitals, no decent services, poor infrastructure, no pension plans for former employees, no facilities for children of former employees, etc.).

Another reason why things must change is that unfortunately some investors in Malawi have left behind problems including polluted rivers / lakes/ grounds, deforestation, environmental degradation including soil erosion, sick former employees and suchlike. This is simply unacceptable in the 21st Century and should not be allowed to happen.  

A well thought through legal framework will reduce the likelihood of such omissions happening in the future.

There are some lessons from what countries like Tanzania, Rwanda and Botswana are doing, which Malawi can learn from. There are even lessons from China! For example, Rwandair is owned 51% by the government of Rwanda and 49% by Qatar Airways (See this).   Similarly, Airtel Tanzania is owned 49% by the Government of Tanzania.

These companies contribute millions of dollars to the state coffers of these countries.

So how much more are such resources required for a country such as Malawi, where ~ 70% of the population live in relative poverty? I propose that as much as FDI is desired, and as much as it is needed, the deals that are signed can no longer be about only appeasing the investor with disproportionate ownership stakes, while the people of Malawi who are supposed to own the resources are left with next to nothing. This can’t possibly be right.

You can try and justify investor ownerships stakes of 80%+ or 70%+ of industry in poor countries whichever way you like, but with the current global levels of inequality, such type of disproportionate ownership stakes just don’t cut it.

FDI under the Tonse Alliance Government of President Lazarus Chakwera should be about how to ensure the Malawian people are stakeholders who actually benefit from investments into Malawi. Enough with the rhetoric of the past, right now show us how investment will actually pull people out of poverty.

So Government of Malawi FDI policy should be about protecting the people from the exploitative and corrupt practices of some companies, which leave far too few long-term positive benefits or sustainability in the areas they invest in.

Of course protection of Investor Rights and strong pro-Investor Laws are necessary, even essential to ensure that the private sector flourishes. But there has to be a balance in that equally Strong Labour Laws that protect workers should be established, complemented by Strong Environmental Laws and strong Consumer Protection Laws to ensure that Malawians are treated with dignity, and that there is fairness; to ensure that each investor receives written obligations / responsibilities towards consumers/ people living in the areas which will be affected by the FDI.

It’s not a zero sum game, so both groups can benefit from the investment.

Such a policy position is also important for social cohesion. For example if you go to any township in Malawi today, and ask people what they think about certain companies, you’ll find that some companies (and the senior people who work there) are disliked by large sections of the populations in those areas because those companies are perceived as exploitative and not doing enough to empower the local man on the street. Yet such companies benefit from locals – who buy their goods, or provide cheap labour. Clearly this is not a desirable situation.

So while Malawi is open for business, when an Investor comes to invest, be it into a resource, or to extract a raw material, it should be the Government’s clear position that the company will be expected to establish a development fund, where 10% of the profits must be invested, to develop schools, to build decent housing, hospitals, roads, transportation links, to provide electricity, high speed internet, & to provide scholarships & loans to children in the area including children of employees and former employees. All this must be in black and white, enshrined in the contracts which are signed with each investor. Otherwise there is a real danger, based on past experiences, that verbal promises some investors make will amout to nothing.

What everyone needs to understand is that historically, most investors who come to Malawi walk away having made a lot of money. Our weak laws, poor bargaining, corrupt officials and poor implementation of measures designed to protect against exploitation are the reasons why we have failed to benefit proportionally from the profits that FDI has generated the last 25 years or so.

Thus, if you really want to develop the county, then the state can no longer be a mere passive observer in terms of ownership stakes and management of major industries. Malawi should have a greater stake in industry, so that, as a developing poor country, the proceeds from these interests can help catapult us forward economically.

This means deals of 51% GOM ownership (like Ethiopia and Kenya are now doing), and Botswana has done for a long time, whereby the investor holds no more than 49% of the stake in each major interest / industry / company,  should be standard.

That can still translate into profitable returns of millions of dollars for the Investors. But the difference is that GOM, and Malawians will benefit proportionally than has been the case in the past.

Mind you, these are Malawian resources we are talking about, for Malawians to benefit from. So 51% ownership by GOM by 49% ownership to Investors is quite generous. In my view that is how you create a win-win position.

There will be criticisms to such policies, as has happened in other countries. But such criticism is levied by people who :-

  • are thinking only about themselves
  • do not understand where our country is coming from (and the level of poverty/ want in our villages)
  • believe incorrectly that Africans should be subservient or otherwise in deferment to what Western Capital dictates – including unfair geopolitical neoliberal policy positions on resources, agricultural produce & raw materials.

What the Tonse Alliance Government should do is to communicate to any interested investor that while Malawi is open for business, essentially they will be dealing with a deprived man, who has been taken advantage of and abused for a very long time; who has few resources and who needs every penny from those resources to move forward, to rebuild his ruins and to feed his young.

That deprived man will only do business on his own terms. And with investors who care beyond just about making profits.

Ultimately, there’s always another fairer, more ethical, more responsible, more empathetic and more compassionate investor down the road …

The Jappie Mhango allowances fiasco is only the tip of the Iceberg of corruption in Malawi

If you’ve followed this blog for any length of time, you’ll know that Malawi has a big corruption problem. It is a fact and there’s no getting away from it. At least not in the present scenario where Peter Mutharika’s DPP is in government.

But for the benefit of those who are not aware of the scale of corruption in Malawi, or what this post is all about here goes; a few days ago, Malawi’s Health Minister Jappie Mhango, and Malawi’s Minister of Information, Civic Education and Communications Technology Mark Botomani were caught by a video recording discussing how they would hide the hefty allowances they were drawing from Covid19 Emergency fund. This is despite Mark Botomani appearing earlier on TV denying allegations that ministers were benefiting from any Covid19 related funds.

As would be expected people in Malawi have been outraged by this development with one Human Rights organisation, HRDC calling for the resignation of the ministers within 7 days.

As thousands of health workers continue to be poorly paid, it is reprehensible that these ministers would connive to cheat Malawians including the Health services even in an emergency situation. Just last week, there was a leaked circular from the Treasury’s recently dissolved Special Cabinet Committee on Covid-19 indicating allowances (termed “Risk Token”) per day for each Minister as MK450,000 (~US$611) and for each MP as MK350,000 (~ US$475) as remuneration for their tours in preparation for the pandemic. Those figures do not include accommodation and fuel allowances, which when factored in push the daily allowances to around MWK700,000! That’s more than twice the monthly salary of a Registered nurse in Malawi! and nearly 3 times that of lower bands of nurses (e.g. diploma holders from the Malawi College of Health Sciences).

No surprises then why people are outraged. Such exorbitant allowances cannot be normal or justified when the government has not provided adequate Personal Protective Equipment (PPE) to health care workers including nurses and doctors, in preparation for the Covid-19 pandemic.

Normally, the Office of the President and Cabinet (OPC) and the Treasury approve allowances structures and once that is done OPC dispatches circulars to government departments for noting and filing. Now in this emergency situation where there was a short notice, who approved the allowances?

Jappie must have discussed with Treasury Principal Secretaries that the government system is completely off bounds, because the way the government system works is that when a transaction is decided, Ministry of Finance and Treasury have to approve the expenditure. What’s happened here is that Jappie and his Controlling Officer (who is the PS) decided to breach that process.

This smacks of lack of discipline at the highest level in government. However, according to allegations from a source who declined to be named, Jappie Mhango’s corrupt ways are not new.

The allegation says that a few years ago, when Jappie’s sister (one Mrs Kaunda) was Secretary of the then manager at the Ministry of Education Division in Lilongwe (Central West), Jappie, his sister and one Thoko Chimuzu who was the Principal Planning Officer then (and is now PS at the Ministry of Information) used to supply maize and beans to schools in a racket that targeted schools. When funding from Education Headquarters to Education Division had been issued, Jappie and his clique would first deduct money that was due to them from their supply activities, and only then would the rest be used to towards the mandated payments for which the funds were issued. There was no restrain, no acknowledgement that there may be a conflict of interest.

Today even though Jappie has a constituency seat and a ministerial position, my source says that the trend never stopped, and the source is baffled how educated people behave in this shameful way.

The source said Jappie is extremely opportunistic and does not think of the effect of his actions or the conflicts of interest that arise. So the thieving team of Thoko Chimuzu and Jappie Mhango is still in operation today, and Mark Botomani is just the latest addition. Apparently, the racket included one Justin Adak K Saidi (a PS at Education) who rose from being a primary school teacher, and who was a protégé of Patrick Mbewe. Apparently, their dodgy operations have included using teachers to rig elections for UDF, and recently in 2019, for DPP. In fact the very idea of Tippex originated from this clique. They monopolize every opportunity to the extent two of Saidi’s children were awarded 2 scholarships to China.

If these allegations are true, then they simply confirm everything many of us have been writing about all these years. Peter Mutharika’s DPP government, as illegitimate as it is, if full of selfish people whose number 1 aim is to plunder the state for personal gain. If Peter Mutharika was truly interested in fighting corruption, he would have fired all these loose cannons and corrupt officials out of his government long ago.

These people will use whatever means to deprive Malawians of resources. They are not public servants and they do not have the best interests of Malawians at heart. Jappie Mhango has shown you his true colours, he is only interested in self-enriching himself. Please believe him.

The Anti-corruption Bureau needs to take note and begin investigating such rackets, including looking at these kinds of payments and allowances across the chain of command at the Treasury, the OPC and the Accountant General’s office, and whether they fully comply with the law.

Government officials including ministers and MPs should not take advantage or benefit from public schemes that are designed to help Malawians. There should be absolute transparency, a clear distinction and a clear separation between “public official” and “Supplier”. Simply put, if you want to be a supplier to the government, you shouldn’t hold a public office, and shouldn’t be in a position where you can influence the awarding of contracts for your own personal benefit, or to benefit your company, your relatives’ company or a company belonging to your friends. That is the only way we will ensure that public resources are safeguarded, and are not misused or fraudulently diverted by such rackets.

The inspiring young South African behind a township textile company

…Tshintsholo’s plan for the future is to one day open a pan-African bank so that the continent’s countries no longer have to borrow money from elsewhere in the world and remain ensnared in debt. But, in the meantime, he wants to focus on completing his education and growing production capacity in his textile factory.

His advice to other entrepreneurs is to have patience when it comes to growing their ventures and reaching their dreams.

“Even though in the short term things might look like they’re not coming together, as long as you have that long-term vision of where you want to go, you are on track to getting there. If you don’t know where you want to go, you can’t get there. So have a clear picture of where you want to be, and build towards getting there,” he highlighted….

The inspiring young South African behind a township textile company

Citizen led Development

CitizenActivism

The problem with Malawi is everyone wants to be president. Whether this is as a direct result of enduring bad and inefficient government for so many years, under several clowns who somehow managed to lay claim to the crown of public office, or whether this phenomenon is a misinterpretation of what democracy actually is, by a largely closed-minded and ignorant rural population – I do not know for sure.

What I do know, is every noisy little fella (and it’s often a man), with his 2 tambala of broken english wants to be the president. Just buy him a few bottles of Carlsberg and play some Afrobeats tunes, bokobo, doro bucci, skelewu or anything like that and within no time he’ll begin telling you what he’ll do if elected president, even though he’s never held public office let alone been a member of any political party.

Don’t get me wrong, I’m not against competent people being of service to Malawi. My worry is incompetent people wanting to undertake such service.

I’ve been around many a drunk fella. From the carefree high school days of imbibing on Redds outside the benches of Chichiri shopping mall in Blantyre, admiring the beautiful girls ordering take-aways at Hungry Lion (or was it Wimpy ?) – then catching a minibus to Ndirande in time to get back into school before the 6pm head count; I remember the pub crawling days at Nottingham Uni. – when you’d return at 3 or 4 am to your bed (and the next day fail to remember exactly how you got back, or who the person sleeping next to you was). At that time, you were still expected to be at your lectures at 9am, and yes a register of attendance was taken; I remember the nights at Kwacha in Nottingham, where Malawians would argue with Nigerians over as simple a concept as whether the free movement of people in the SADC region was helpful…trust me I’ve seen many a caroused character.

But strangely, it’s only Malawians who uncover their political ambitions when drunk?? None of the Nigerians, Kenyans, Tanzanians, English, Australian, American or Malaysian nationals I’ve encountered at pubs or drinking places in the past talk of politics when drunk?? Maybe it’s also down to the people I’ve mixed with…?

But still, it makes me wonder: Is the Malawian attitude to politics (if such a thing can be said to exist) part of the problem. That too many of us want to have a crack at steak on the bone, when we have no teeth, and can barely tackle porridge? When, in the proverbial sense, we are but babes.

No wonder then that too many of our politicians have no clue on what running a country entails – as evidenced by bad decision after the next. Because they got into politics for the wrong reasons, they fell into it: As they say in Chichewa, Anangogweramo. They have not studied Public administration, or been working in an official capacity, discharging or administering a public service or function to the public, for any considerable length of time, how on earth are they supposed to know what the business of government is all about? Sadly, many assume that being in power equates to doing anything you like – often with public funds? And funny enough, the people, those being governed (who elect the officials to power), also wrongly assume that ‘boma’ can do pretty much anything they like.

Or  I’m I missing something?

This is the challenge facing Malawi: of ‘rampaging’ public officials drunk with power, abusing their positions in the face of an ignorant, resigned and powerless populace; neglecting their responsibilities in preference to self-enrichment.

All this is happening on the full-watch of toothless Civil Society Organisations, and in the face of the donor community, who it appears are happy to look the other way.

Here, a comment is appropriate. Seeing that donors have refused to resume budgetary aid, because of the corruption and looting of public funds, I wonder what else they can do – to ‘encourage‘ good governance?

Lets speculate for a moment.

Is it conceivable, I wonder, for donor countries who have in the past supported Malawi via budgetary aid, to begin funding entrepreneurs? Not throwing $200 to the guy selling charcoal or tomatoes, or mbewa by the side of the road in Dedza, no, not that entrepreneur – if you can even call him that.

What I mean is why can’t donor countries support the kind of entrepreneurs who can create wealth for hundreds or thousands of people in Malawi? As in the cooperative which is trying to buy a plough and combine harvester to farm 50 acres of land; or the activist who is speaking out to power, demanding good governance, and has a sizeable following… Maybe let me rephrase the question… Why don’t donors begin funding Social entrepreneurs, including ACTIVISTS – if both groups can be assisted to create jobs for other MalawiansWith the understanding, a very clear understanding that their impact should be designed to have a domino effect towards achieving wider developmental outcomes?

Malawi needs everything. From a mental and political transformation (often talked about by many other far better placed commentators), to decent and well resourced hospitals, Malawi needs to improve its security (or a sense thereof), it needs reliable utilities (Water and Power), quality education … better customer service, the whole lot.

But the common denominator that stagnates any prospect of change, in all if not most sectors, and that is in critical shortage, is resources in terms of funding. Instead of looking away, donors should transform the way they work in Malawi and other African countries, and begin providing resources to those people or organisations who truly want to make a difference. I’m not saying its easy or simple. What I’m saying is it is necessary.

Some people may be asking how this is going to work? How practical is this? Well, I think it is practical, because how many other ways can you create self-sustainability that does not involve the government, if not dealing directly with the people?

What they could do is create a portal (which I can create for them by the way) where requests for funds for certain projects can be made online? The donors can then have a team that will vet and review these requests and respond accordingly.

What about those people without access to the internet? Well, what about an application process by post or in person, communicated to unconnected communities for example using radio adverts…or if they want to do more, a mobile awareness campaign using a van such as the one below, which would have a team on board to review face-to-face proposals in the communities they broadcast?

mobile-radio-tv

They could even partner with TNM and Airtel to market such a scheme, and utilise the reliable networks of these telecom companies.

In the past, the usual responses to these kind of questions is we are already funding entrepreneurs. And that’s not our role, usually communicated in sentences that include words such as ‘ambit’ and  ‘mandate’…

If the ultimate goal of donors is to encourage good governance and effect development, then it is within their mandate to help provide resources. It’s all well and good providing funds for food, education and healthcare, but if after you’ve cured peoples diseases,and educated them, they have no job to go to, or no sustainable way of earning a living, what’s the point of giving them aid in the first place? If they then have to struggle to get by. Isn’t this exactly the kind of thing that creates dependency?

A nonprofit that practices social entrepreneurship, on the other hand, relies less heavily on donor funds because it creates social programs that are meant to be self-sustaining. Social entrepreneurs manage donor contributions in an effective manner, investing in social ventures which can then generate their own revenues to sustain themselves. More here

But why does it matter Sangwani, why is it important? Why should anybody care?

Well, firstly as a Malawian it matters when I see so many competent young men and women who are not utilising their full potential because of lack of money. That’s a real concern which I’m sure is shared by thousands if not tens of thousands others.

But it also matters because in a centralised governance system such as that in Malawi – where everyone looks to the president to sort out all their little problems, lack of resources is holding back well-meaning people from acting independently to develop their part of the country. It’s a waste of talent and it’s holding them back from helping plug the shortfall in the different aspects of our economy; especially since the government is not doing many of the things they should be doing.

And this situation is not sustainable because too many capable people are powerless to effect the kind of change Malawi needs – with the result that the country is not moving forward. And come next election, in 2019, the largely ignorant rural population I mentioned earlier will be conned again into voting for another white elephant, and the vicious cycle will repeat itself all over again, worsening the living condItions, and bringing Malawi ever closer towards becoming a poor failed violent state. In the ranks of Somalia and Yemen. Surely, neither donors nor Malawians want this.

Also, there is evidence that successive governments in Malawi have taken advantage of this lack of funding to abuse their positions, and engage in dodgy deals, costing the tax payer. There are too many examples to cite, but two that come to mind are the Jetgate (the alleged sale of a presidential jet by President Joyce Banda – the funds of which were never accounted for), and the recent report that showed that $2 billion had been misappropriated by government officials the last 6 years.  How come none of the CSO’s sued the government on behalf of the public over these major instances of misappropriation of funds? Further, why does it look increasingly likely that many of the perpetrators of such misappropriation will get away with it?

Finally, lack of funding encourages corruption because otherwise decent people are forced to go begging to the government, the presidency or the presiden’s party – because they have no money – instead of them speaking out against bad governance and government’s failures in tackling societal ills.