MALAWI: Remaining in the Dark

• by Claire Ngozo (lilongwe)
• Thursday, August 11, 2011
• Inter Press Service

Power interruptions are common in this southern Africa country where households and businesses go for up to six hours at a stretch without electricity. A day barely passes without the electricity being switched off and at most times it goes out without prior warning.

Now economic commentators say the country’s chances for trade growth have been ruined as the MCC rescinded its decision to improve the energy sector. The country’s unreliable power supply has always presented a difficult environment for both local and foreign investors.

Chancellor Kaferapanjira, chief executive officer of the Malawi Confederation of Chambers of Commerce and Industry, a partnership of enterprises and associations representing all sectors of Malawi’s economy, told IPS that the hope for a better energy sector has been shattered.

'The powers that be in this country are not doing much to help the situation. The energy crisis is being made worse by the local authorities. Government knew from the start that the MCC would demand good governance in exchange for the assistance it pledged to Malawi,' said Kaferapanjira.

The MCC said in a statement on Jul. 26 that it made the decision to withhold the funds because of the use of force by Malawian authorities to prevent peaceful demonstrations on Jul. 20 and 21. Restrictions had also been imposed on the media reporting on those demonstrations.

Up to 19 people were killed and 275 arrested in the demonstrations staged against President Bingu wa Mutharika in protest against frequent fuel shortages, acute shortage of foreign exchange, recurrent and long spells of power outages, and water scarcity.

The MCC funds, which were to be utilised within five years from 2011, were to be used to increase the efficiency of existing power generation and to upgrade the transmission and distribution network.

It was also meant to provide support towards building capacity in the Electricity Supply Corporation of Malawi (ESCOM), the country’s sole supplier of electricity; the Malawi Energy Regulatory Authority, the energy regulator; and the ministry of natural resources, energy and the environment - the executive policy-making ministry for energy.

The project was aimed at reducing power outages and technical losses, enhancing the sustainability and efficiency of hydropower generation, and improving service to electricity consumers. The MCC indicated that it was doing this to improve productivity in the agriculture, manufacturing and services sectors and to support the preservation and creation of employment opportunities in the economy.

Malawi has been trying to improve the power situation and it has been in consultations with Mozambique pursuing a power interconnection deal. However, this remains a plan; Malawi is poor and depends on donors for developmental work.

Up to 40 percent of Malawi’s national budget has been dependent on donors and 80 percent of the country’s development budget was being provided under the Common Approach to Budget Support, which includes funding from Britain, Germany, the African Development Bank, Norway, the European Union and the World Bank. The British and German governments are already refusing to release up to 400 million dollars, accusing the Malawi leadership of dictatorship and failure to uphold the rule of law.

Kaferapanjira said there is now uncertainty among the business community on how they would continue plying their trade without a reliable power supply.

'As a country we’re going backwards. We are facing inadequacies (meeting) the import needs because the manufacturing industry (cannot) perform to its best capability due to the frequent power outages,' said Kaferapanjira.

The frequent power blackouts cost the country 215.6 million dollars per year in business and industrial production losses, according to Kaferapanjira.

John Kapito, executive director of the Consumers Association of Malawi, a local non-governmental organisation that protects and promotes consumer interests, told IPS that consumers feel let down by their own government for acting in a way that has put the energy sector in jeopardy.

'The MCC money was coming in as a much-needed relief to consumers and the business community. We were all looking forward to boosting trade and having cheaper prices for consumers as we anticipated that commodity prices would be reduced because of availability of energy. We now feel let down by our own government,' said Kapito.

Since 2006 Madalitso Gamaliele has been running a small-scale business in the country’s capital, Lilongwe. She grinds and processes maize and groundnut into flour, which is used as food by many Malawians.

Gamaliele said she is experiencing huge losses at the moment due to the erratic power supply.

'I have to close down the mill every time power is switched off and people, especially women who come to have their food ground, stay for long hours before they have their food processed. I used to make up to 100 dollars per day but now I make just about 20 dollars per day,' said Gamaliele.

She said she had hoped that the MCC funds would improve the energy situation for the country and her business.

'I am not sure if I can continue with my business now. It looks like the power outages will continue for a long time,' she said.

'The way forward is to engage everyone in the country, especially government, to commit towards the promotion of good governance and respect for democracy so that we don’t lose out on such important funding,' said Kapito.

At the beginning of July ESCOM announced that the country would begin to experience longer power outages until the end of the year due to maintenance work taking place at the main hydro power station in the country’s commercial centre, Blantyre.

The funds from the MCC were supposed to come into effect before the end of this year and were to be used to improve the performance of Malawi’s hydro-electrical power, which has a generation capacity of 287 megawatts (MW) against a demand of 300 MW.

MCC projections indicate that the generation requirements for 2015 and 2020 are 603 MW and 829 MW respectively.

Government authorities have not said much on the issue. Malawi’s Finance Minister Ken Kandodo told the media soon after the MCC announced its decision that the country will be holding discussions with the U.S. agency to work on clearing issues with the MCC and to get it to reverse the verdict.

Meanwhile, power interruptions continue and businesses continue to suffer.  

© Inter Press Service (2011) — All Rights ReservedOriginal source: Inter Press Service

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