Kapito says Malawi to face chaos, disobedience over economic hardships

Consumer rights advocate John Kapito has warned that there will be “chaos” and “civil disobedience” over economic hardships, saying the fuel price hike is just the beginning of a series of increases.

Kapito, who is executive director of Consumer Association of Malawi (CAMA), said the increased fuel price announced on Saturday would push up costs across the board and said Malawians are squeezed on their necks.

“Everything is going to cost more,” Kapito, who last month led protests against the rising cost of living, told Nyasa Times on Sunday in a telephone interview.

The price of petrol has gone up from K606.30 per litre to K704.30, representing a 16.16 percent rise; diesel is now selling at K683.60, up from K597.40, which represents a 14.45 percent adjustment, while paraffin is going at K591.90, from K509.90, standing for a rise of 15.98 percent.

“We are really squeezed in our necks and it is equal to death,” Kapito said.

He said the pump price hike is likely going to trigger broader inflation in the southern African nation that has already seen protests this year because of the dire state of the economy.

“The issue of automatic pricing mechanism and floatation of the Kwacha are some of the issues raised in our petition. We expect answers from government,” said Kapito.

The CAMA boss said the Kwacha currency “is getting weaker and weaker everyday resulting in the fuel prices adjustment.”

Kapito said the floatation of the currency cannot work in Malawi, saying the country has no exports to raise the much needed foreign exchange.

“We are beggars as a nation, we need a managed floatation,” he said.

“It is quiet sad. What is a point of having fuel when you can’t afford it.

“There will be chaos, a lot more of unrest and disobedience. I can smell the anger out there. I am pleading with people to calm down,” he said.

According to MERA chairperson Lyton Zinyemba, the Malawi kwacha depreciated against the US dollar from K323.90 on November 9th 2012 to K365.16 as noted on February 4th 2013 representing a 12.73 percent loss in value of the local currency.

Zinyemba said a combined effect of the Free on Board (FOB) prices and the exchange rate of the kwacha against the dollar resulted in increased landed costs for fuel.

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