Another lesson in how not to expand the tax base.

The Micro Small and Medium Enterprise Order (2020) is being touted by some as a way for MSMEs to benefit from Government procurement.

But whats not being talked about are the far reaching effects that may result from the correct and totally lawful business registration which the order requires.

Isn’t it the case that as soon any MSME registers as a business, the taxman will at that point be entitled to show up, arms akimbo, sniffing for any tax kwachas that may be lurking around undeclared?

Jokes aside, my point is there’s no guarantee that every single business that registers will benefit from the order. This is why in some countries there is always an option to run micro businesses as sole traders where it is in fact the person running the business who is liable for any taxes that may be due.

Malawi currently has a small tax base, and a small private sector. And while on the surface it may appear like a good idea to try and bring into the formal economy as much as possible of the informal economy, in practice that only works when people do actually have significant resources, which is not the case now, for the majority of people in the informal economy – many of whom live hand to mouth. Already, many small businesses complain that they are overburdened by taxes.

What the Government should have done is to focus on the creation of new large corporate entities… beyond Public – Private Partnerships. I mean organisations that can process goods at scale and export large quantities abroad, at a profit.

You can only squeeze so much profit out of a starving donkey which the Malawian tax base currently is. If you push too hard, and burden the donkey with more than it can take, that donkey will crumble and faint. And you will lose out.

A wiser move is to bring additional resources from outside the country. Our leaders are not seeing the bigger picture in this whole equation. The money is not in asking Malawians to pay yet more taxes.

And for those of you saying it would kill local small enterprise, no it would not. Because those corporate entities can actually work with those small enterprises you mention, helping them in more ways than one, minimally, saving them money. Our leaders need to start thinking like business men/ women.

Let me give you a simple example. Suppose the Government of Malawi (GOM) started a shipping company, and bought 2 Cargo Ships. Instead of the local shipping companies paying British or Italian or Greek Ships, GOM can enter the market at attractive terms, so that those local companies instead use the GOM Cargo Ships, saving a bit of money that way. The insurance of the Ships will be provided by local companies. The trucks which collect the containers from the port will come from Malawi… the whole chain will employ Malawian staff … even some of the food, and generally provisions on the ships for the staff who will be working on deck in the weeks that the Ships navigate between the European / American/ Asian ports and African ports can be cooked or prepared by Malawian companies…

How can all that be a bad thing?

That’s just one example in the logistics field which would give GOM millions of dollars in additional revenue, if you consider the annual earnings of other shipping companies that operate between Europe / US and Africa.

It’s a model Ethiopia (and many other countries) uses quite successfully with their airline and their state owned telecom company. We can learn a lot from them.

How much does an Ambulance cost?

But even if you didn’t want to dish out a fortune on new ambulances, there are other options. For example, there are companies which sell used or refurbished ambulances, and the prices for these vary, but some ambulances registered as recent as 2018, cost less than US$14,000. This means that if you added on the cost of the shipping ontop (about US$5,000 from the UK/ US to Malawi), you would be looking at paying around US$20,000 per unit; roughly one-third of the quoted price!

Obviously these figures will vary widely and will depend on various factors including the ambulance type, whether it is new or used ambulance, and equipment installed, the list of requirements from the buyer (beyond standard equipment), and the type of manufacturer. But the above gives a window into the world of ambulance procurement / manufacturing, albeit from an outsider’s point of view.

Why asking interview candidates ‘Kodi kumudzi kwanu ndi kuti?’ should be outlawed in Malawi

Former President Peter Mutharika’s presidency was characterised by accusations of tribalism

Let’s be honest, there have been some unfair recruitment practices in Malawi the last few years.
For example, why is it the case that the first question some candidates were being asked in interviews was ‘Kodi kumudzi kwanu ndi kuti?’ (Where is your village?).
How is that question relevant to the position that is being advertised? How does where one comes from provide the interview panel with answers as to a candidates suitability for employment?
You might say such questions are ice breakers, merely small talk, but actually the anecdotal evidence shows that this question was often used with the intention of identifying where people came from, and filter out those who were deemed by some members of the interview panel, as coming from the “wrong regions” or of not being the preferred tribe, such that positions would often be awarded to people who were deemed as ‘ndi wathu uyu’ (they are one of us).
It is a pointedly tribalistic question, and there is little rationale to asking it during interviews, unless you are intentionally trying to find a way of marking down someone based on their tribe/ethnicity.
Our Labour Laws in Malawi (Section 5 (1) of Malawi’s Employment Act 2000) prohibits discrimiation on the basis of Race, Sex, Religion, Ethnicity, Marital status and Nationality among other characteristics. In particular, it states that No person shall discriminate against any employee or prospective employee on the grounds of race, colour, sex, language, religion, political or other opinion, nationality, ethnic or social origin, disability, property, birth, marital or other status or family responsibilities

Subsection 3 prescribes a fine of K10,000 plus a 2 year prison sentence. So it’s incredible that questions that have a thinly veiled inquiry into one’s ethnicity or tribe continue to be asked 20 years on?

The practice of interview panels asking where one comes from, or where one’s village is needs to be stopped immediately. And it needs to be stopped via a stronger legislative framework – one that is actively enforced.

The Ministries of Labour, and the the Ministry of Civic Education & National Unity should work together in creating and backing legislation that can be introduced into parliament to explicitly prohibit employers from asking any questions that coerce a candidate to disclose their village, region of origin, language or family roots in interview questions, employment reviews, promotion interviews or other pre-appointment interviews . And if such questions are asked, candidates should have a recourse to redress, including compensation, with the state levying penalties to the offending company, institution or organisation.

If you are Malawian, you are Malawian. Full stop.

Asking kuti “Kumudzi kwanu ndi kuti” should be made an offence under new and stronger employment laws.
No longer should HR managers, General managers, Directors, Interview Panels and others who periodically interview candidates or are invoved in the interview process be allowed to ask such tribalistic questions.
Such legislation would prevent discrimination against some Malawians on the basis of their place of birth or family origin. It would open up opportunties for all Malawians to feel co-ownership of the nation, without regard to tribal affiliations. Isn’t that the meaning of Malawi was Tonse?
And if you are one of those people who objects to such a policy, claiming that the question is asked to prevent non-Malawians masquerading as Malwians in interviews. My answer to that is that there are several other better ways of ascertaining whether one is Malawian – without being caught up in tribalistic social engineering.

STEPPING DOWN TO STEP UP: WHY MALAWI SHOULD FOLLOW IN MADAGASCAR AND CABO VERDE’S FOOTSTEPS


A RECENT REPORT BY THE INSTITUTE FOR SECURITY STUDIES (ISS) ARGUES THAT MADAGASCAR AND CABO VERDE HAVE EVENED OUT THE ELECTORAL PLAYING FIELD FOR ALL PRESIDENTIAL HOPEFULS BY LEGISLATING THE STEPPING DOWN OF AN INCUMBENT PRESIDENT PRIOR TO PRESIDENTIAL ELECTIONS.

  • Listen to this article by clicking here [via SpeechKit]

These two cases are singled out as they are anomalies in Africa’s political landscape, which is marred by what the ISS’s report has termed ‘Incumbency Abuse’.
In Malawi; no elected president had ever lost a re-election, since the nation became a democracy in 1993; until this year when Peter Muntharika lost to opposition leader Lazarus Chakwera. Often, incumbents have won by a meagre percentage (38.57% in 2019, 36.4% in 2014) not representing the choice of the majority of the eligible voters.

While the First-Past-The-Post electoral system partly explains this, a large reason for these candidates being re-elected as opposed to an opposition candidate winning the election is the incumbency advantage their position gives them to garner resources for political campaigning.
The report highlights that mandating presidents seeking re-election to step down before going to the polls removes an acting president’s access to state resources for political campaign uses.

In 2015, Malawi’s then deputy Mayor for Mzuzu City, Frazer Chunga, was cited in an article by The Times Group saying his official car had been grabbed by the regional committee for the Democratic Progressive Party (DPP), of which former President Peter Muntharika heads, for campaigning use.

Such abuses would be easily mitigated by legislating the mandatory stepping down of a president seeking re-election prior to elections. Additionally, this would put all candidates on par, with the exception of an incumbent being able to show what developmental goals (if any) have been achieved nationally during their tenure.
Furthermore, the ISS finds that instituting a mandatory stepping aside of an acting president would assist in “addressing negative perceptions of voter manipulation and vote-rigging which have contributed to post-electoral violence and political instability on the continent [of Africa].”

This is of high relevance to Malawi as the country has gone to the polls for the second time in two years on the 23rd of June 2020.

Since Muntharika was announced re-elected in May 2019, Malawi had experienced a year of public demonstrations let by CSOs including the Human Rights Defenders Coalition (HRDC), who claimed that the last elections were rigged and highly manipulated by the incumbent. Thousands of citizens joined the HRDC in support of the protests, culminating in the Constitutional Court nullifying the 2019 poll in favour of fresh elections.

Thus, the stepping down of a president to avoid even the perception of tampering with the electoral process would go a long way in promoting post-electoral peace and stability and insuring that issues of malpractice are resolved independently.
The report however, does state that the stepping down of a president before an election, is not a fool-proof mechanism to mitigating the problem of incumbency abuse. Presidents are still able to control systems, making them work in their favor though not being in power. This being said, systems can always be improved, checked, and completely rewritten. As such, while being a concern, it does not negate the call for presidents to set aside their presidential duties until post-elections.
In a nutshell, with rising impunity and incumbency abuse in the African continent, the recommendation of the ISS for other African countries to follow the examples of Madagascar and Cabo Verde should be seriously considered by policy-makers if Africa is to truly work towards free and fair elections for all.

And while Malawi has broken the cycle of an incumbent president never losing, the ushering in of the new regime should not be viewed as the solution to all incumbency abuse. Let us see if when the time comes, Chakwera will be able to step down, to step up.

Hybrid Economies – 5 Practical Solutions for fixing Malawi’s Economy

Malawians have huge expectations of the new government in Malawi.

If you speak to anyone who has been following politics in Malawi the last few years, you’ll understand why. Malawi is a country that has many problems.  However, before I get into some of the most pressing of those problems, please allow me to first make an introduction.

The Oxford Dictionary defines the word hybrid within the field of biology to mean, the offspring of two plants or animals of different species or varieties.

If you dig a little deeper you will find that some hybrids inherit the best qualities or characteristics from both parents; essentially the desirable genes from both species may feature in a hybrid. This can include resistance to disease, greater fortitude and stamina, more desirable crop yield, more patience and less obstinacy (in animals). This means a hybrid can be a much better specimen than both the parents, with characteristics which make the hybrid more desirable (or more valuable) than organisms within either of the parent families.

In economics the name Hybrid Economies has been used to mean a mixture of commercial economy and open source / sharing economy (see more here). In the ‘Hybrid Economies’ series of articles, I’ll use ‘Hybrid Economy’ to mean a quasi-planned economy that uses Commercial Agriculture, Financial Services, Technology and Manufacturing as methods of generating income for the government.

So, what are the 5 things the Tonse Alliance Government of Lazarus Chakwera and Saulos Chilima must do right now, to turn the prospects of Malawi’s economy.

  1. Revamp Public Institutions & Parastatals to become productive Again

Dissolving and suspending the bloated boards of all parastatals was a necessary and welcomed move. But a lot more is required.

The truth is Malawi’s parastatals and public bodies are inefficient, operate at a loss or are simply not productive. Certainly not to they extent one would expect a state owned institution to be, with all the advantages such can have.

Revamping state institutions and public bodies is long overdue, and it must involve bringing in implementors, managers, technocrats and scientists who are qualified to lead change, and who know how to turn-around failing institutions. It means employoing people from all sections of Malawi and beyond, to contribute to the new Malawi. This is necessary so that the lucklustre performance we are all so accustomed to, at bodies such as MACRA, ESCOM, MBC, MRA, NOCMA and many others is transformed, and these bodies begin to be led and managed by competent professionals who can actually transform them for the better. The process must also entail weeding out those people who found themselves in positions of authority or who got jobs only because of cronyism, nepotism and tribalism.

The Office of the President and Cabinet (OPC) should instruct the Anti-corruption Bureau (ACB) to review all civil service appointments that have occured the last 5 years, in these Parastatals, and even government ministries, and ascertain whether such appointments were undertaken in accordance with the law, following all procedures, and based on merit. If not, such appointments should be terminated, and the positions re-advertised

2. Issue low-interest Sovereign Bonds as a way to raise money without taking on too much external debt, & to prevent being bound by restrictive conditionalities

Malawi is indebted. We owe the IMF, the World Bank & co lots of money. We owe the Indians lots of money, we owe the Chinese lots of money. We even owe the African Development Bank … lots of money.

2 years ago, that debt stood at US$4.1 billion, which was 62.91 % of GDP.

We have to do something decisive about this debt once and for all. We have to try and emulate countries like Japan which has been known to raise significant funds from their own institutions and their own citizens, and use those funds to create new revenue streams for their countries coffers. It’s not good enough to say “All countries have debt” (which is one response I often get when I raise this issue) because developed countries don’t suffer from the same problems (nor to the same extent) as most poor countries.

Further, and this is an important point; if a country goes to the World Bank or IMF to ask for a loan, that country will be expected to operate within the rules and conditions set by those institutions. They’ll control the narrative, and dictate any penalties. You will have no choice but to play by their unfair rules. However, if you issue Sovereign Bonds, you control and set the conditions of that issue, and can adjust the terms to suit your economy. You’re free to invest that money in a way that has the greatest impact and benefit to your country’s economy. You can play by your own rules. I’ve said this several times in the past, and it is my hope that the current government in Malawi will begin to think critically about these things.

3. Create an International Money Transfer arm of the Malawi Postal Services (MPS)

I have written about this issue before, here. It’s important because those of us who form the Diaspora, and who regularly send money back home use private companies- that (unfortunately for us) make significant profits out of our hard-earned cash. In 2018, the market size of remittances made using companies the likes of Western Union, Money Gram, Ria and Transferwise was a mouth-watering $689 billion dollars (See this). When some Money transfer companies are charging up to 10% of the transfer amount in fees, this is prime potential territory for innovation, which the government of Malawi can take advantage of. Because why should I pay £50 to a private company when sending money back home, if a state run institution could provide a comparable service that helps me move money relatively cheaply, with the added advantage that the transfer fee I pay is instead used to help my country raise the funds it very much needs for development programs.

And it doesnt have to be a complicated affair. Initially, it can be a case of incorporating MPS branches in countries with significahnt Malawian diaspora populations, like South Africa, the US, the UK, Canada, Australia, Germany, Zambia and a few others, to facilitate a peer-to-peer money transfer service. This can be followed by opening bank accounts in these countries, and developing an App, much like that developed by World Remit (which works with Airtel Malawi’s Mobile money wallet) or like that developed by Transferwise.

4. Lower the cost of phone calls and Internet data

Pretty much every month, we hear stories of people complaining about how high the cost of making phone calls and data is in Malawi.

Last week, someone published a complaint that their 10GB data bundle disappeared within three days, even though they were not using any data intensive applications. It’s a story that is all too familiar, and while I’m not suggesting of any wrongdoing on the part of the major Telco operators in Malawi, including Airtel and TNM, the government ought to look at this issue to see if there is something they can do to help the country’s citizens. This is important because ideas are the bedrock of the 21st Century economy and if people are not able to communicate cheaply or face impediments in accessing content, it will have a negative effect on the country’s capacity to adopt progressive ideas, the capacity to deliver digital content, improve learning and be an active participant in the world economy.

In discussions with a friend who once served as the Technical Director at MACRA, one quick solution to ensure citizens get value for their data and voice call costs is not only to lower the taxes levied on these, but to ensure full implementation of the CIRMS at carrier sites.

Yes, Malawi is a country with a free market economy, but where things are not working, good aspects of a planned economy are necessary.

5. Launch a ‘New Deal’ program for major Construction Projects, Jobs and Entrepreneurship

Malawians have been crying for development for too long. It’s time for the Tonse Alliance to heed this cry and truly build a country that works for all. This is where the vice President Dr Saulos Chilima in his new ministerial portfolio can truly shine.

Our country needs better roads (which won’t disintegrate within a few years), our country needs better hospitals with high quality standards to match hospitals in South Africa, England or Malaysia, our country needs infrastructure fit for the 21st century. It’s not just about building hotels, golf resorts or holiday resorts for the rich that will bring jobs, jobs and more jobs. Indeed with creative planning half a million to a million jobs can be created within 4 – 5 years if you factor in employments in building new factories, new commercial farms, new schools, new Universities, new bridges, new airports, new business centres and new conferencing facilities … across the whole country. Also, how many people are going to be working in some of these new places?

Yes, we will need a lot of equipment, yes, we’ll need large amounts of capital (already addressed above) with which to purchase all the equipment that will be needed, and a lot of technical expertise (something I will address in a few weeks). But it is achievable, if we put our minds to it, and work together.

It should no longer be the case for politicians to fly abroad in search for medical treatment. Why would they need to, if we build state of the art hospitals in our cities across Malawi?

Malawian children should no longer be learning in leaking mud shacks that have thatched roofs and no desks.

A welfare system should be established to assist those who for all manner of reasons are unable to work, or are in hardship, with a priority given to orphans, households where the bread-winner is a child, people with a disability, and the elderly and infirm.

Malawian youths need low interest loans, guaranteed by the government. Because many of the current financial providers have taken advantage of people for too long. Interest rates on personal or business loans should no longer be over 10%. You cannot build a functional economy when Financial services Companies are predators, who predate on people’s poverty and vulnerability. Loan providers’ first mandate should be to help businesses and individuals make money, and achieve financial independence, and not to make extortionate profits from vulnerable and underpaid citizens. This also calls for strong government regulation within the area.

Further, where will a smart 23 year old graduate with a 1st class or 2nd class degree, who is fresh from University find collateral with which to support their loan application? Not everyone comes from an affluent home….

Zinthu zikufunika zisinthe. Malawians have spoken. It’s time to act now.

Links

Should Malawi’s next Cabinet reflect the country’s demographics?

So you’ve managed to get the May 2019 Presidential election results nullified. Great! And since February the 3rd of this year, your beloved Malawi, the beautiful country which you love has become a shinning star, the gold-standard in judicial independence anywhere in the world.

Fantastic news!

Media outlets everywhere are praising you, Africans are congratulating you, everyone who knows you are Malawian talks positively about the developments in your country in terms of free and fair elections and an independent and competent judiciary. You feel proud. Fabulous!

Look! The FT has called the Constitutional Court decision… a victory for African democracy’. (Yes, the same Financial Times with revenues of $500 million). Favourable publicity doesn’t get any better than this, does it? All great, all wonderful stuff.

But let’s not get too excited too quickly here. Let’s not celebrate too much … yet. Ask any honest person who follows politics in Malawi, and they will tell you that while the victory against the fraudulent enterprise that is the Malawi Electoral Commission is one important victory battle in a war of many battles, there is unfinished business and on-going tussles that must be won in order to to clean up the structural rot in Malawi’s public bodies.

As Professor Danwood Chirwa put it here in his brilliant analysis whose intro was “The rearguard action has begun“, some people will fight tooth and nail to resist any meaningful change.

For example, there are Malawians who still think it is okay for a president or a government minister to decide which contractors should be awarded lucrative government contracts?? Then, there is the matter of public appointments; why should the heads of statutory corporations or parastatals still be appointed by the president, under a system that is definitely not merit-based – see [1], [2] for reference?  What about the boards of statutory corporations, shouldn’t their composition also be merit-based, and shouldn’t they be appointed by an independent body? What about public sector reforms. Didn’t the commission heading the initiative say the lack of political will was the reasons why bringing in the reforms had failed, with the UNDP comenting that: “Reforms call for transformation of organisational structures, a merit-based public service, transparent processes and procedures for improved service delivery.” (source: ‘Reforms on deathbed’, Rex Chikoko, The Nation)?

“Reforms call for transformation of organisational structures, a merit-based public service, transparent processes and procedures for improved service delivery.”

There is also the issue of the independence of the graft-busting body – the Anti-corruption Bureau (which in the past has been accused of being partial and having factions controlled by the executive); there is the matter of the independence of the police (who have at times used violence and acted shamefully against Malawians as if they were merely an unruly mob of the ruling party – see [3],[4]); there is the issue of the taxpayer-funded MBC, and how biased and unprofessional it is – see [5],[6]); there is the issue of political advisers, party honchos, strategists and other minions (some who like to call themselves “ana a daddy”) amassing fortunes and large amounts of unexplained wealth…

I could go on and on, and on.

And then there is the issue of the make-up of the Cabinet (which in past administrations, not only Peter Mutharika’s administration, has not reflected the country’s demographics). Wouldn’t it be fit and proper if Malawi’s next Cabinet more accurately reflected the country’s demographics, and was more than just a reflection of the president’s inner circle, party loyalists, cronies and tribal buddies?

Shouldn’t such be a given, that in a 21st century young democracy, one with (unfortunately) deep seated tribal allegiances, we should have a Cabinet that reflects the country’s ethnic make-up?

In any case, how are we to get rid of tribalism, cronyism, regionalism and nepotism in public office in Malawi, if we ignore the problem, and certain ethnic groups continue to be favored whereas other ethnic groups are sidelined and discriminated against when it comes to ministerial appointments, or more generally public appointments? You can’t say you have a genuine interest to get rid of tribalism, cronyism, regionalism and nepotism, but fill your cabinet positions, parastatals and board posts largely with yes-men, people from your village, chiefs, cronies from your region, members of your enthnic cultural association, and family members galore. That can’t possibly be right! Those state bodies can’t possibly excel.

If Malawians are going to fully capitalize on the Constitutional Court’s decision, and clean up the country’s many ills and failings (let’s be honest, there are many) for the benefit of every Malawian, then important undertakings like public appointments, cabinet positions and ambassadorial/ foreign mission postings must not be rewards for patronage or loyalty, but must be transparent merit-based exercises which reflect the country’s demographics and in the best interest of all Malawians.

Why the Malawi Postal Corporation should enter the business of International Money Transfer

money-card

A few weeks ago, I watched a Christmas party video in which the speaker talked about remittances by migrants living in the UK, and immediately I got an idea.

Why doesn’t the Malawi Postal Corporation (MPC) enter the business of International Money Transfers? Not only in Malawi, but across the region…

In that video, the London mayoral candidate George Galloway said that if he is elected mayor of London in 2016, he will move to make City Hall enter into the business of International Money Transfers, except it will be done on a non-profit basis. It made me think about how Malawians particularly in the UK and the US spend so much on charges and fees to send money to their loved ones.

The choice of the MPC may seem like a random or even odd one, but it is not. The Malawi Postal services has a wide network of 180 Post Offices across Malawi and 154 postal agencies in the country. Surely with such a wide network, they must have the capacity to add an additional service of money transfer ontop of the other services which MPC already offers? The only difference would be that this service will not depend on Money Transfer Operators (MTO’s) such as Western Union, Moneygram or other services, thereby more of the benefit of the transfers will remain on African soil.

In any case, remittances to East and Southern African countries have been steadily increasing. In 2013, US$28.7million was sent to Malawi from abroad (up from US$14.5million in 2006, see Index Mundi here) and US$72.8 million was sent to Zambia  (Source: Examining the Relationship Between Received Remittances and Education in Malawi, Kasvi Malik, Claremont McKenna College, 2015). Zimbabwe received US$1.8 billion in 2013 (Source: Zimbabwe: Diaspora remittances in decline, The Africa Report), Tanzania received US$75.34million in 2012 and Mozambique received US$117million in 2010(data-World Bank)

In total the Overseas Development Institute estimates the total cost of fees charged by the Dallas based MoneyGram (whose 2014 revenues were US$1.45billion with $456.4million Gross Profit) and the Colorado based Western Union (whose 2014 revenue were US$5.6billion with $2.31billion Gross profit) to be US$1.8 billion (see Watkins, Kevin & Quattri, Maria. “Lost in intermediation: how excessive charges undermine the benefits of remittances for Africa.” Overseas Development Institute, April, 2014.Web. 20 March, 2015).

Surely this is money which should be utilised within Africa?

But why is this issue important?

Our Countries in Africa need money. Poverty lingers, our education systems are in tatters, we have high youth unemployment, healthcare crises, and in the face of illicit financial outflows, receding or suspended aid budgets, relatively small FDI’s and the corruption problem (which is far from going away), every penny counts.

Every penny must count.

The African Diaspora is a burdened community. The majority usually accept low-paying jobs, spend more money relatively than indigenous populations to establish themselves, are milked dry by extortionate immigration fees, have less social capital in the countries they dwell (therefore less access to informal or supplementary sources of funds), and fewer fallback protections than indigenous populations. In some countries, migrants have to pay more for healthcare, and for services which are free to the locals. They find it harder to access capital (with which to start businesses – which could help them financially), and on top of taxes, Social security / council tax, etc.. they have many mouths and responsibilities from family members back in their home countries, dependants who are often expecting dollars, pounds or Euros for their livelihood each month; to pay for rent, food, school fees, medical care and other expenses.

So how would the MPC Money Transfer scheme work?

On a very basic level, a non-profit organisation would be incorporated in the UK, the US, Malawi, Zambia, Zimbabwe, Tanzania, Kenya, South Africa and Mozambique, with bank accounts opened in all those branches.

The organisation would have one or two staff members based at the Malawian embassies in each of these countries. The Malawian government would deposit US$100,000 in each of the bank accounts, and when a remittance has been made, the organisation would level a 5-10% fee on the value of the remittance, as a cost for sending the money. A mobile app would be developed to make the job of transfering money easier, and contracts with banks and money gateways would be utilised to allow payments to other bank accounts or services in the participating countries on favourable terms. Any profits made at the end of the financial year after all the costs have been deducted would be donated to a fund to be used for job creation for youths, healthcare initiatives and other such purposes across Africa.

Obviously it’s not going to be as simple as that, and current market players are unlikely to want a new serious entrant with Social ambitions, but you get what I’m saying.

A few years ago, some people suggested that Diasporas Bonds (Read Economist article here) was the way for African migrants to help invests in their countries, but the scheme still depended on the likes of Western Union.

I acknowledge that the rise of mobile money has had a positive impact on empowering rural communities across Africa, but I’m not convinced that the benefit of such has been significant or evenly distributed among the people who use it. Indeed, it seems to me that a handful of entrepreneurs, and a few corporations (for example Orange SA who own Telkom Kenya, the part-owner of Safaricom, which owns Mpesa. Safaricom is also partly owned by Vodafone Group) have reaped the majority benefits of the mobile money revolution, meaning what mobile money has done, is made companies and corporations who are owners of the various platforms richer.

What I’m calling for is a scheme whereby our governments in Africa, as opposed to MTOs or private companies control a greater chunk of the pie, with a hope that such would lead to greater investment in services for the greater good of our people.

Basic Utility Vehicle (BUV) COMES TO MALAWI

BUV-MALAWI

The Malawi Project has sent three BUV’s to Malawi. The Basic Utility Vehicles are manufactured in Indianapolis, Indiana by the Institute of Affordable Transportation. These units are the brainchild of Will Austin, and have been in production since 1998.
A unit was sent to the Namikango Mission in Southern Malawi where it can often be observed hauling furniture to various locations on their 85 acre campus. It is also being used to carry firewood from a controlled forest to a location near the clinic where guardians can cook for the patients. The BUV will also help moving supplies or staff from various work locations.