Saulos Chilima served Malawi as Vice President for close to 10 years. Coming fresh from the corporate world where he was Airtel Malawi Managing Director, Chilima, fondly known as SKC, first saved as Malawi’s Vice President from May 2014 to May 2019 under former President Peter Mutharika.
The February 3, 2020 landmark ruling by the Constitutional Court saw Chilima bouncing back as Malawi’s Vice President before he was re-elected alongside President Lazarus Chakwera on June 23, 2020.
Chilima’s thinking about the economy
One thing Malawians must remember is that Chilima was a PhD economist.
In a number of economic and political forums, Chilima made his thinking clear about how to improve the Malawi economy.
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On October 30 2020, Chilima hosted a Mindset Change Lecture at Bingu International Convention Centre where he spoke about the need to upload a new, positive software in the minds of Malawians.
Chilima believed that the old thinking of looking at problems as problems and embracing negativity that somethings cannot be done in Malawi was pulling the country down.
“We need to believe that we can change the status quo through persistent and adaptive efforts. We can transform our country from poverty to prosperity.
“View our challenges as opportunities. A very good example is we can’t get investors into Malawi because there is no energy. Sir, madame, that’s an opportunity for you to come and invest. It is a business opportunity. It is not a problem.
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“Can we move on? We need to move as a country. It’s not about me, it’s not about the President,” he said.
Malawians can transform Malawi
In his preface for Malawi’s long-term vision, the Malawi 2063, Chilima, as Economic Planning Minister, indicated that he had confidence in the capability of Malawians transforming their own country.
According to Chilima, Malawians had spoken with a very loud and clear voice that they desired a new Malawi where all live quality life, prosper together and become self-reliant as a nation.
He observed that a united and proud people that believes in its own abilities would be the cornerstone to the implementation and realisation of the vision.
He emphasized the need for Malawians to develop themselves into a globally competitive and highly motivated human resource.
Industrialisation key to Malawi
Chilima believed that industrialisation is key to development of Malawi, saying industrialisation helps to create jobs.
Speaking during the 2021 Economics Association of Malawi (Ecama) Annual Conference, Chilima said industrial jobs tend to be higher paying than jobs in other sectors.
He observed that industrial jobs are crucial in improving the living standards of the people.
“Given that industrial jobs are better paying, countries that industrialise are better able to meet the basic needs of their population such as health, education, housing and sanitation.
“The story of Korea and the Asian Tigers is testimony to this benefit of industrialisation,” Chilima said.
According to Chilima, although Malawi and South Korea were similarly situated around the 1960s, due to industrialisation, South Korea is today a high income country with a gross domestic product (GDP) per capita of $31,489 compared to Malawi’s GDP per capita sitting currently at $625.
“But the good thing is that the journey has started and, sooner or later, we shall be telling our own story,” Chilima said.
He added that industrialisation offers a way of diversifying the Malawian economy and its export basket from reliance on narrow range of primary products.
According to Chilima industrial development reduces a country’s dependence on other countries.
“A country must be able to certain minimum level of processing of primary products and be self-sufficient in a number of manufactured goods,” the veep said.
He highlighted five factors which have hindered Malawi’s industrial development.
“These include lack of capabilities which includes infrastructural deficits, especially in energy, transport and telecommunications. And that is worsened by limited skills in evaluating projects.
“Number two is lack of institutions to support market-based industrialisation. And this includes institutions for industrial standards, testing, and export support and quality assurance.
“The third one is institutional barriers. We have cumbersome and redundant licencing regimes that take very long time to approve investments. After investment, there are also a battery of regulatory obstacles that need to be surmounted. And the reforms agenda will aim to address this,” he said.
Interest rates must fall
At the same indaba, Chilima made an interesting appeal that interest rates must come down, saying this must be non-negotiable for the banks.
He observed that deposit rates that banks were giving customers were too little as compared to lending rates.
“Thus, the Reserve Bank must engage banks on this issue as a matter of urgency”.
“I have also proposed to the Reserve Bank to consider capping the interest spread; if banks raise the lending rates, they must also pass-through the same to depositors,” he said.
Malawians too nice with each other
Addressing the 2023 Ecama Annual Conference, Chilima challenged the country’s economists to provide alternative policy options to equip the economy with the tools needed to absorb, adapt and recover from unexpected events and shocks swiftly, ultimately ensuring continuity in economic growth.
He said, in recent years, the country has witnessed how negative external shocks to the economy can create instability and can lead to persistent periods of weaker economic growth, higher unemployment, falling real incomes and rising poverty.
According to Chilima, Malawi has experienced recurrent episodes of exogenous shocks including adverse weather conditions such as floods, tropical cyclones, and droughts; health crises such as the Covid-19 pandemic and the recent cholera outbreak.
Chilima said Malawi does not have the luxury of time, adding that Malawians cannot afford to watch and contemplate to postpone confronting these economic shocks to a later date.
“To set the ball rolling and to stimulate the deliberations, let me say that we have to be open and candid with one another. Some of the problems that we have as a country are because we are too nice to each other. We sugar coat things,” Chilima said.
