New Year’s Eve Thoughts: Part 1

The Malawi leadership first needs to understand its own current trade and investment strategy and how its policies are affecting the strategy. Both domestic and foreign investors make decisions on the basis of prevailing policies and the policies have to convince them that they will make a profit. For foreign investors, policies also have to allow them to repatriate their profits back home. For leadership to make public demand to know location of investors’ bank accounts and accuse retailers like Game stores and Shoprite of stealing Malawi’s forex is sad.

Let’s start from the beginning. Government had a choice to either accept or deny Game stores and Shoprite opening up shops. I assume when they were allowed, Government understood how the retailers operate. Since capital account is closed, Government monitors any repatriation of profits and dividends. The two stores operate in 10-15 countries in Africa and have a defined business model that provides for re-stocking products from South African, local suppliers and other supply countries. What is required is to know their supply chain management and try to make a breakthrough in getting a bigger share.

Obviously the retailers are not saints but they should be treated as partners because they are partners. Their contribution to the economy is huge which Government on their own cannot provide. They have created employment, pay taxes, procure services on local market, have local bank accounts, pay electricity, telephone and water bills, buy Malawi fuel(when available) etc. Game Stores (Zambia) is the most profitable Game stores in Africa. www.massmart.co.za/pdf/massmart_game_lusaka.pdf Maybe it’s not a good yardstick but as the article states, 60% of its employees drive to work. It tells a story of the kind of employees Game has employed. Shoprite has 16 shops in Zambia (has 2 in Malawi). The two retailers are productive investors in SADC and it is up to each country to maximise the benefits that they bring.

Why then Mr President the outburst? In trying not to accept responsibility, our leadership is everyday scratching for blame targets. Blame the British; blame NGOs; blame gays; blame IMF; blame Americans; blame opposition; blame tobacco and cotton buyers; now blame foreign retailers! Please don’t make us a laughing stock! Malawian people are smarter than what you are portraying. We all know that Malawi’s tragic fall has fingers pointing in one direction: Bad and misguided policies! These (too many to reproduce) have led to lack of foreign exchange and low prices of our crops which has had ripple effects in the whole economy. Now we don’t have fuel, drugs, electricity, water, and decency. The fact that Game and Shoprite repatriate their dividends and profits is not a reason for our lacking forex as they have always repatriated since they opened operations. You could do justice to the people that employed you (Malawians) by giving us in figures the contribution of Game and Shoprite to our economy against the forex they repatriate. This should include the PAYE; Corporate tax, VAT; utilities; employment etc. Then you can go back on the public platform and make more accusation as to why foreign retailers should fund our Zero Deficit Budget.

Where does Malawi go from here? I discuss this in Part 2 of my New Year’s Eve Thoughts

Happy New Year from Chihoro Castle