Breaking News

Tweet TWEET

Malawians Protest Against Soaring Costs, Slump in Kwacha

Malawians began nationwide protests today, condemning President Joyce Banda and the International Monetary Fund after a currency devaluation pushed inflation to 33 percent.

More than a thousand protesters marched in the center of Blantyre, the commercial hub, watched by police officials. They delivered a petition to District Commissioner Charles Makanga calling on Banda to reverse the currency changes, reduce her spending on travel and raise wages.

“This is the beginning,” John Kapito, executive director for the Consumer Association of Malawi, which is leading the protests, told demonstrators in Blantyre. “We are giving the government 21 days. If they don’t address our concerns, we will camp at the president’s official residence.”

Banda, 62, devalued the kwacha by a third against the dollar a month after taking office in April and deregulated fuel prices. That was in line with recommendations from the IMF to allow the resumption of donor aid. Gasoline costs have climbed 69 percent since May, while the central bank raised its benchmark interest rate by 4 percentage points to a six-year high of 25 percent last month.

The kwacha has slumped 27 percent against the dollar since the devaluation. It dropped 1.5 percent to 350 a dollar by 12:11 p.m. in Lilongwe.

Police Clashes

Marchers sang songs accusing Banda of selling the country to the IMF. The fund’s Managing Director Christine Lagarde, who congratulated Banda for her economic reforms during a visit to Malawi last month, isn’t welcome in the country, they sang.

“The reforms are taking time to register positive results and this is frustrating many Malawians,” Billy Banda, executive director of human rights group Malawi Watch, said in a phone interview yesterday. He isn’t related to the president. “The euphoria people had after she took over government has waned.”

Demonstrations also took place in the capital, Lilongwe, and Mzuzu in the north. Police monitored the crowds to prevent a repeat of clashes that occurred during protests in July 2011, when 22 people died.

Malawi is Africa’s biggest exporter of burley tobacco, a low-grade variety of the crop, and Limbe Leaf Tobacco Co., a unit of the U.S.-based Universal Corp. (UVV), Alliance One International Inc. (AOI) and Japan Tobacco Inc. (2914) are among buyers in the country. About half of the population of 15 million live on less than $1 a day, according to the IMF, while the government relies on donor funds to finance 40 percent of its budget.

“When I was young, my dad could afford bread, now he can’t afford a piece of cassava,” Ireen Phiri, an 18-year-old student, said in an interview at the march in Blantyre. “I see our welfare deteriorating every day.”

To contact the reporter on this story: Frank Jomo in Blantyre at fjomo@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.