MaKwatchas

Malawians spend kwatcha. It rhymes with “gotcha.”

(This is part 2 in an ongoing series about money. You can read part 1 here)

At current exchange rates, $1 equals about 160 MWK (Malawi Kwatcha), which will buy you a loaf of bread, a bottle of beer, four eggs, two samosas, eight mandasi (unsweetened donuts), a long trip on a bike taxi, a short trip on a minibus, 16 bags of water or sachets of gin, or 32 homemade freezes.

It won’t buy you fuel.

A filling station with no queue is a filling station with no fuel. This one is just outside of Blantyre. The Petroda in Ntcheu hasn't had fuel in the 5 months I've been watching it.

Fuel, both petrol and diesel, are in short supply in Malawi. Like I used to count train cars, I now count cars in fuel cues, and reaching 100 isn’t uncommon – rumours of which filling stations might get a fuel delivery bring cars, trucks, minibuses, and people with fuel cans to line ups that last overnight, or even for days, in the hopes of buying some of the precious energy. In November, fuel prices jumped more than 30%, and are now well over $2 per litre. Legally. There is also a thriving black market for fuel: the scarcity means that people are willing to pay extremely high prices to get the fuel they need – I’ve heard of prices as high as 1000 MWK per litre, equal to about $6.25. Some of this fuel is smuggled over from Mozambique, and some is bought from legal sources and then stored for resale once the legal fuel runs out again. Sometimes vendors mix it with paraffin, cooking oil, or water to stretch their sales a bit.

The problem is forex, or foreign exchange. It is generally felt that, despite a 10% devaluation of the kwatcha in August, the currency is overvalued, and so the government has a hard time getting enough foreign currency to import fuel. The result is the high fuel prices, which in turn raise the prices on all other commodities (since most products travel at some point before sale, or need inputs that have to travel). And also contributes to disrupted power supply (backup generators used by some offices, factories and hospitals to mitigate the regular blackouts need fuel to run), time off work while people sit in fuel queues, skyrocketing bus ticket prices, and general stress and annoyance.

 

Sidenote 1: The insanely high fuel prices here are squashing my belief that people will use less oil if it is made more expensive. I used to think more taxes on gas would help reduce consumption, but the high sticker price in Malawi doesn’t seem to have that effect.

Sidenote 2: It’s that time of year when EWB is raising funds to continue its work in Canada and Africa. If you’re able to make a small donation to support EWB and my work with the Malawi Water and Sanitation team, I would really appreciate it! For extra fun, calculate your donation in terms of kwatcha value above – $5 worth of freezes would buy out the supply at the Ntcheu market on a Thursday.