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Malawi at bay

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A week ago, I was watching briefly a BBC documentary in which the presenter was having an adversarial discussion with a former mayor of Lagos.

The presenter said Nigeria and Afghanistan were the most corrupt countries in the world. The mayor retorted that, according to law, that who receives stolen goods is as much a thief as the one who has actually done the stealing. The presenter, a Briton, did not rebuff that point but said the fastest growing countries in Africa now are Cote d’Ivoire and Angola.

We know already that a tiny Rwanda on the shores of Lake Victoria is becoming the Singapore of Africa. All these countries have known periods of civil war, very prolonged in case of Angola, brief but bloody in case of Rwanda and Cote d’Ivoire, yet now their economies are booming.

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Malawi is always mentioned in connection with poverty, famine and scandals. A country that during colonial days reputed to have some of the cleverest natives is failing to make headway economically. There is something thought-provoking in Napoleon Hills book Think and Grow Rich. Do we spare to think and analyse the problems that beset Malawi? Very much doubtful. We are a nation of orators, yes, but not deep thinkers.

People of the West have still a lot to teach us Africans about how to keep on improving. We easily learn how to use the latest devices invented by westerners such as computers and mobile phones. But we never reason as to why and how they came to invent these marvels of

civilization. We have to learn how to become inventive and innovative before we can become competitive and successful in world markets. The inventers of the West begin by identifying a problem a firm or a country faces and then try to invent a device that can be used to solve that problem.

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When farmers were experiencing shortages of labour and inadequate harvests, some of the talented individuals spent years to try and invent that we know as a tractor. Telephones had been in use for at least a hundred years. They facilitated contact only between people near telephone booths or in houses and offices. Once they were outside homes or offices, they would not communicate. The clever westerners spent years trying to invent the type of a telephone receiver that someone could carry around, hence the mobile phone. The first step in inventiveness is to identify a problem as to what can be done to solve it and proceed in making experiments. It is not an easy task but they persist.

It has been said Malawi must be transformed from a predominantly importing and consuming country to one that is predominantly producing and exporting. This has been the rhetoric over a long period but why are we not making it in the global economy. There are several reasons. Here let us just discuss one. This is the problem of uncompetitiveness in the market both at home and abroad.

In the early 1980’s, ex-president Kenneth Kaunda of Zambia came on a state visit to Malawi. In his entourage was my closest friend of the time. He was a naturalised Zambian. He had grown up in a village close to mine in that part of Mzimba directly under the paramount chief. While in Blantyre, I received him at home. One of the remarks he made was that having travelled to many parts of the world including India and the Middle East, he had found out that our hotels were very expensive.

Are we serious about making Malawi an attractive tourist destination? Then we must look into the question of hotel accommodation; why are our hotels so expensive?

That same year, one day I went to a bookshop in the centre of Blantyre to buy a record that had been imported from South Africa. Watching me buy that record was a man who spoke chiNyanja usually identified with eastern Zambians, “What!” he exclaimed,” You have paid K15 for this record? I have just returned from Johannesburg where they sell the same record for the equipment of K5.” He was only the second or third person telling me that merchandise in Johannesburg shops were much cheaper than in Malawi.

I have sometimes bought a kilogramme of rice imported all the way from Thailand at a price not higher than a kilogramme of rice from within Malawi. Someone told me Malawian rice exported to Harare has been selling at a higher price than rice from the Far East.

Needless to say Malawi’s basic problem is inability to produce marketable goods at competitive prices. Problems that firms face are somewhat similar to those countries face. After all, problems of individual firms add up to national problems.

A firm entering a market with a new product uses two methods of pricing called skimming and penetration. If it introduces a product that has never been on the market before, maybe because it has been recently invented, the firm adopts the skimming pricing plan. This entails charging as a high price as the buyers can afford. If the product is such as the public have been anxious to have for a long time, they will buy it even when it is highly priced. Imagine someone invents a drug that could cure Aids, would most people hesitate to buy it at an exorbitant price?

When a company wants to sell a product that is already on the market, it adopts the market penetrating plan by selling it at a price lower than the prevailing prices in the market.

Malawi is not a country of inventors or innovators. The products that it can sell abroad are those which have already been invented by people of other countries. To be able to sell its exports, it will have to charge lower prices or else will be unable to compete. The problem to discuss and solve is how we can make quality products economically so that they can sell in global markets. We have to think hard about this and solve the problem of being expensive producers.

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