VOLA: Job creation and Economic efficiency: Options for Malawi – Godwin Nyirongo


Unemployment remains one of the biggest challenges that Malawi as a nation is still facing. The country has on the overall had a minimum growth in investment level which among other reasons is the fact that the country’s economic conditions and policies are not conducive for both local and foreign investors. The countries financial sector which could support the growth in investment continues to face a number of challenges such as shortage of foreign currencies, capital adequacy, poor liquidity management and effects resulting from the depreciation of the kwacha. With regard to the nature of the economy which is to a large extent agro-based most people are seasonally employed, others are self employed or subsistence farmers working on their farmland whilst others are employed in some of a few available industries mostly owned by foreigners where labor exploitation still seems to be the older of the day. The wages that most of these workers get are just mere peanuts which cannot sustain them and their families and the government has over the past years been seen sitting comfortably watching its people suffer in the hands of such “inhuman” investors most of whom are taking advantage of weak implementation of labor laws by government and poorly organized labor unions and of course the bigger factor being that some of the government officials receive bribes from these investors as one way of zipping their mouths. 

The Malawi government under President Joyce Banda’s mandate has recently introduced the labor export program as one way of creating the so scarce employment opportunity for its citizens. This comes amid some bilateral ties that the President has made with some Asian/ Middle East countries such as South Korea (where the labors are expected to work on farms/estates), UAE (Dubai) and Kuwait. The program will export about 300 people who are expected to earn about $1000/each as monthly salary.

Much as this program seems to be a development which some people are supporting I am of the view that this is a failure on the part of government.

To begin with, it is quite obvious that the government does not create employment however it has the power to influence the economic conditions which in the end can increase employment opportunities among its citizens. This can be done by setting up a conducive environment for both local and foreign investors such as setting up taxes which are very minimal and meant to perform the government’s legitimate duty, allowing private investors to hold private property and at the same time providing enough security on such properties, allowing competition among market participants and letting the market produce the best outcome by not intervening in the economic activities of the market, combating corruption, avoiding political favors for some businesses and making sure that the financial sector provides reasonable support to the investors such as charging a reasonable interest on businesses. Now the problem with the Malawi government has been its negligence towards putting these factors into action. Corruption remains one of the battles that Malawi is still fighting and this is what has always been behind inefficient allocation of resources.

The great problem that our government has is that it is politically oriented than being profit oriented, that is, it focuses much on improving its political image towards its citizens than improving people’s welfare, which automatically will paint a rosy picture of the political will that the government is interested in. Entrepreneurs have largely been neglected in most of its plans hence the presence of few companies, which cannot contain the high population of unemployed people out there. Entrepreneurs continue to face high fees on their exports/imports hence they do not have access to enough resources that will be used for investment. High taxes on businesses remain another factor that is forcing people out of business as this reduces net profit that these investors make hence it is difficult to expand their businesses or re-invest in other businesses. Political instability has been seen as slowly building up and also affecting most business decisions among some interested investors and poor technology which could make more information available for investment purposes and also could lead to high levels of production is also a challenge behind Malawi’s imperfect performance.

Due to these factors, there is no potential for the country to achieve high employment opportunities as despite one’s will to invest, conditions within the country restrict such innovation hence fails to create the much needed employment. Graduates are being produced at an exponential rate but many are just “white elephants” who can spend up to ten years searching for jobs and indeed the government is still dominant in running most economic activities and some few loyalists to the government are continually reaping a share that would have been equally earned by everyone had it been that it was equally made available to all.

Should exportation be the solution therefore? The answer is absolutely NO. The government should just consider making its development plans based on free market economies where the factors described should be put into fuller use and allow private entrepreneurs create the jobs that the people dearly need. Labor exportation is a modern means of Slavery or human trafficking it therefore puts lives of our dear brothers and sisters at greater risk hence the need to reconsider such programs. The government needs to be profit oriented because this is what will propel the creation of jobs that we are hunting in some foreign lands.  


A Voice Of Liberty Africa contribution by Godwin Nyirongo from Malawi

Godwin Nyirongo thinks Malawi is looking to solve the right problem the wrong way