Taonga Sabola & Emmanuel Moyo:
Malawians are failing to cope with the supersonic speed at which prices of commodities are rising on the market, The Daily Times has learned.
In snap surveys conducted across the country, The Daily Times has established that in recent weeks, traders, especially small-scale ones, have been hiking prices of commodities almost on daily basis.
The traders are blaming the situation on Kwacha’s instability, despite the official rate of the local unit to major trading currencies remaining constant.
A Lilongwe City-based wholesaler Monday said forex is not available at the official rate and that for them to remain in business, they have been relying on the parallel market, where it is available at a premium.
“I thought you are a business reporter? Do your research. Try to get United States (US) dollars on the official market and let’s see if you are going to get them. Others are selling one United States dollar at K4,200,” he said.
Some forex bureau operators at Kamuzu International Airport in Lilongwe yesterday indicated that they were struggling to get the greenback because of the relatively lower rate they are buying it at.
They indicated that they are buying it at an average rate of K1,910 and selling at K1,950.
In Blantyre City’s Central Business District, some black-market forex traders were selling one US dollar at K4,200.
However, the traffic of US dollar buyers painted a picture that some Malawians were okay with the prevailing price.
Gerald Kanyika, a resident of Karonga District, said the increase in prices of goods had significantly impacted the cost of living, as the rate of price hikes did not align with growth in income.
“Unfortunately, the items affected are essential commodities, leaving many of us in a hand-to-mouth situation. We are finding the situation very tough to manage,” he said.
Troy Samuel Vyazhi, a resident of Nsanje District, said rising prices had made budgeting almost impossible.
“Actually, the situation is forcing me to be borrowing money for consumption, just to survive,” Vyazhi said.
Another resident, student Blessings Chidziwitsano, said he had been unable to buy food and other basic needs with the pocket money he gets from his parents because of the unstable prices of goods.
“I used to spend less than K20,000 on commodities per month. Now I am spending K50, 000 just on food per week,” he said.
Residents of Kasungu District also said they were concerned about the daily rise in the prices of goods.
Haswel Suphuka, a resident of Kasalika, Senior Chief Kaomba, said they could hardly keep track of commodity prices.
“Last week, we were buying a loaf of bread at K2,200. The same loaf is now selling at K3,000,” he said.
In Mzimba District, 21-year-old Marriam Banda, who runs a mandasi business, said her business was “heavily hit” by inflation.
“For instance, in December last year, a kilogramme of wheat flour was selling at K1,500 but the same kilogramme is now selling at K3,700,” Banda said.
She said the change was significant and was dragging the business down because customers were not happy that the price of one ndasi had risen from K200 to K300.
“In trying to remain in business, we have reduced the size of mandasi as well. This is making customers unhappy somehow but we have no choice. On the other hand, for us to bake mandasi, we use cooling oil, which is selling at K6,500 per litre. This is low quality cooking oil; we can’t manage high quality products, as one litre is selling at K9,000,” Banda says.
Another resident, Paul Banda, lamented rising prices of maize.
“Last week, we were buying a tin of maize at K24,000. This week, we are buying the same quantity at K30,000,” he said.
In January this year, Trade Minister Sosten Gwengwe and Agriculture Minister Sam Kawale stopped some institutions from raising prices of fertiliser and chicken feed.
But the restriction only applied to established businesses and not the small-scale ones.
At the same time, Malawians have seen traders hiking prices of maize to a record K100,000 per 50kg bag.
The price of tomato, the world’s commonest fruit, has also risen.
Asked why they were not stopping small-scale business operators from hiking prices willy-nilly, Competition and Fair Trading Commission spokesperson Innocent Helema said the commission was not applying double standards. Helema said CFTC uses the law, specifically the Competition and Fair Trading Act (CFTA), to ensure competition and consumer welfare.
“You may want to appreciate that the commission will, on some provisions for instance, use tests to determine whether there is a possible violation or not.
“These tests may include establishment of dominance or market power; that is, whether the enterprise may unilaterally manipulate the market. The same is not the case with small-scale independent suppliers.
“The commission may also look at possible exploitation and assess whether the conduct appears to be unreasonable and unconscionable. You may also wish to appreciate the challenges of enforcing the law in an informal market setup,” Helema said.
He observed that if the commission decided to be issuing interim orders on vendors selling maize exorbitantly today, there would be limited capacity to track them the following day for the sake of concluding the investigations.
“Are the vendors registered as business entities whose premises are known and predictable? The answer is obviously no.
“On foreign exchange rate, this is within the purview of the Reserve Bank of Malawi. I must emphasise that the CFTC is not a price control board and that Malawi is still liberalised.
“This means that enterprises are free to charge any prices they deem fit as long as such will not violate [provisions of] the CFTA. The interim orders are issued as an interim measure to protect consumers while the matter is still under investigation. It is not akin to a price control,” he said.
In the business section of this edition, Economics Association of Malawi President Bertha Chikadza has lamented the effects of food inflation on household budgets, saying it is eroding disposable income that would have been invested in economic growth.
This is happening when the National Statistical Office (NSO) has indicated that Malawi’s headline inflation for January 2025 rose to 25 percent.
NSO indicates that food inflation marginally rose by 0.4 percent to 36.0 percent as food prices soared.
On his part, Consumers Association of Malawi Executive Director John Kapito said rising inflation continued to erode buying power, thereby stifling growth chances for many low-income earners.—Additional reporting by Nelson Gonjani, Emmanuel Moyo, Innocent Kalikokha and Blessings Gondwe.
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