INDUSTRIALISATION AND ECONOMIC GROWTH IN MALAWI BY AARON MANYATWAKO MWAKIMBWALA Table of contents About the author A brief history of Malawi. What is industrialization? Why is industrialization important to Malawi’s economy? When should Malawi embark industrialization? How should Malawi industrialize? Why can Malawi’s agriculture and mining sector lead to industrialization? Recommendations and conclusion. 1. ABOUT THE AURTHOR Born Aaron Ngamanya Mwakimbwala A second born son of Mr and Mrs Vincent Alick M. Mwakimbwala. From Kaporo, KARONGA district. GVH Gwereweta. T/A Kilupula, Paramount Kyungu. Did his primary school at Kibwe and St Augustine 1 F.P School, in Karonga and Mangochi Standard 1-6 and 7-8 respectively. Did his Secondary School at Bangwe Nazarene Mission (PVT) Secondary School in Blantyre from form 1-4, (19 Points). A fourth Year student at Pentecostal Life University (PLU). Studying Bachelor of Social Science in Economics. A member of Malawi Assemblies of God. Very active in Malawi Politics. 2. A brief history of MALAWI Malawi is Landlocked country. Located in Southern East Africa. Endowed with spectacular highlands and extensive lakes the biggest is LAKE MALAWI. With fresh water that contains all type of fish species that can not be found anywhere in the World but only Lake in Malawi. Malawi gained its independence in 1964 from Britain. Its economy depends on Agriculture. Its highest revenue comes from exporting agricultural products such as tobacco, tea, sugar, cotton etc. 2.1. AGRICULTURAL PRODUCE IN MALAWI For Crops, Malawi has the following; Maize, Tea, Sugarcanes, Tomatoes, Irish potato, sweet potato, onions, cotton, Tobacco, wheat, sorghum, groundnuts, macadamia nuts, pigeon peas, watermelons, banana, pineapple ets. For Livestocks, Malawi has following; Chickens, cattle, sheep, pigs, goats, ducks. 3. What is industrialization? Industrialisation is the process by which an economy is transformed from primary sector agricultural to manufacturing of goods (Investopedia). Or Industrialisation is the period of social and economic change that transforms a human group from an agrarian society into an industrial society (Dr. Ahmadi Begum, 2019) Generally, Industrialisation is the process by which an economy is transforming from that which is primarily Agricultural to one which is based on manufactured goods where individual manual labour is often replaced by mechanised mass production and where these craftsmen are replaced by assembly lines. A process because it goes into different phases. According to Ricardo who provides support, guidance and consultancy to ‘bridge the gap’ to production, industrialisation in the case of product, in Malawi agricultural product has to undergo the following phases; THE INDUSTRIALISATION PROCESS PRODUCT DEVLOPMENT RAMP UP PRODUCTION CONCEPT STUDY PRODUCTION PLAN INDUSTRIALISATION PRODUCTION Phase 0 Phase 1. Phase 2 phase 3 FEASIBILITY LAUCH PRODUCT SUCCESS GROWTH 4. Why is industrialization important to Malawi’s economy? The characteristics of industrialisation would intel a consistent and considerable level of economic growth, are more efficient division of labour and the use of technology and innovation to bring about change. It is argued that industrialisation plays a vital role in the economic development of under developed countries like Malawi. If Malawi is to achieve significant economic growth as it is stated in the agenda MALAWI 2063 and become self reliant nation has to undergo the process of industrialisation. The following effects are observed or expected in the process of industrialisation: 1. Increased national income Through this process of industrialisation, Malawi as a country will make optimal use of her scarce resources thereby increasing the quantity and quality of goods and services produced and in that process, improvement and increasing the national income of the country as well as the income of Malawians since they will now have more to save and invest from the increased wages and salaries. For example; when Britain was industrialized, total income increased by more than 600% from 1801 50 1901. By 1850, workers in the U.S. and Great Britain earned an average of more than 11 times than workers in non-industrialized nations. 2. Higher Living Standards of Individuals This will be brought about because of the increased productivity which will increase individual’s income and national income and essentially will intel an improvement in the standard of living of the ordinary Malawians Then, Malawians will have access to good diets, better housing and cheaper goods; Malawians will have life expectancy increased. 3. Economic stability. Because exports (agricultural exports) vary greatly, and in this case Malawi will observe that the country can be able to sustain its economic base because of the fact that there is a variety of its export base , with value adding where as in the previous situation (pre-industrialisation) a country would be exporting raw products. When Malawi will go through the process of industrialisation it will export goods with a significant value adding. For instance, instead of Malawi exporting raw tobacco, if she went through industrialisation it will mean that the company that process tobacco in America or Europe will establish a plant in Malawi and process that tobacco into a semi-finished goods which will value add and the benefits will be available to Malawi through exporting. 4. Improved Balance of Payment (B.O.P). How will industrialisation improves BOP? It changes the pattern of balance of payment because of its ability to trade properly, increasing export base, also able to export manufactured goods (high value goods), thereby improving the balance of payments. Where as in previous instances, before a country was industrialised, they would be exporting raw agricultural goods. There will be now a capacity of manufactured goods which have high value base. 5. Increased Employment Opportunities Beginning from the agriculture sector, more labour will be required. The industries absorb unemployed labour, normally from agriculture to the manufacturing to the benefit of all which add value. and therefore the quality of living for Malawians will be improved. Industrialisation intels specialisation of labour and division of labour increases. When there is specialisation of labour you attain maximum productivity and efficiency. Since the idea behind specialisation of labour is to create what is known as economies of scale. In which an increase in productivity reduces average cost for making a product. When workers are trained to perfect one task rather than having to handle a host of tasks, they tend to master the one task quickly and become far more efficient. When workers are efficient, they are also productive. 6. Stimulation progress in other sectors One sector stimulates the activities of the other sector and development one also intels the development of the other, So, there is a speed of effect industrialisation and this goes on, it adds to employment, Gross National Product (GNP) because a country is now able to produce efficiently and with quality products which can be exported. 7. Rise in Agricultural Production During industrialisation, more machinery is provided to agriculture sector replacing the labour that has been absorbed by industries. For instance, United States about 50 years ago, the agricultural sector comprised about 30% of the labour force. Today, only about 2% of the labour force and yet that 2% is able to produce adequate agricultural products that can feed the whole nation because of high mechanisation and industrialisation. Farmers will be producing more food with less manpower since machines will be doing much work. The issue of food insecurity will be story of the past because more food will be produced and to some extent the surplus will be exported. 8. Greater control of economic activities With industrial activity, it is easier to control than when a country is involved in agricultural activity. This is relevant for a country like Malawi e.g in Malawi the agriculture sector is beset with a lot of uncertainties like rainfall patterns are not easy to come by and therefore, very difficult to plan as a country on how to plan the output, Gross National Product and the GDP Growth in general. In the case where there is industrialisation, there is greater control of economic activities. 9. A Large scope for technological progress Under the process of industrialisation, there is also a large scope for technological progress whereby there is provision for potential job training. Technological progress comes in because of innovation which adds value to the country. 10. A reduction in a rate of population growth Currently, the population of Malawi is growing at a faster rate. As of 2022, according to MacroTrends (2022), Malawi registered the population of 20,405,317, a 2.59% increase from 2021. in 2021 the population of Malawi was 19,889,742, a 2.65% increase from 2020. the population of Malawi in 2020 was 19,377,061, a 2.7% increase from 2019. A country that is going through industrialisation, there is a reduction in a rate of population growth. Because there is a family planning, people are becoming more advanced in their thoughts and they have more time to think about work than other things e.g. producing children, therefore, the rate of population is lower when a country is going through industrialisation. 11. An increased savings investment. Through the process of industrialisation, there is an increased savings investment position. Because of higher capacity to save, since people are earning good money, that saving finds path in investment. And therefore, you save and invest and because you invest you employ more people and because you employ more people they also save and therefore you see economic growth having its own positive cycle as well. 12. A capacity to provide defense When a country has industrialised, it has a better capacity to provide defence for itself because it can manufacture its own weapons. For example, USA, China, Russia, India and many western countries, they are able to produce their own weapons because they have reached a stage where technology and advanced economic activities are able to defend themselves. 5. When should Malawi embark industrialization? Malawi 2063 Resolution states that ‘We as Malawians desire and resolve to be an inclusively wealthy and self-reliant industrialized upper-middle-income country by the year 2063, so we can fund our development needs primarily by ourselves. Our manufacturing industry shall have strong forward and backward linkages with the sectors that will drive it. We shall achieve this Vision through collective effort and shall not allow any state or non-state actor to derail us.’ (Malawi2063) By the year 2063 Malawi wants a vibrant knowledge-based economy with a strong and competitive manufacturing industry that is driven by a productive and commercially vibrant agriculture and mining sector. (Malawi2063). Therefore, Malawi needs to adopt industrialization as the first priority among other priorities today than tomorrow. 6.0. How should Malawi industrialize? ‘Change will not come if we wait for some other person or some other time. We are the ones we have been waiting for. We are the change that we seek.’ - Barack Obama. Firstly, the people of Malawi have to accept the change by changing our mindsets. Change is difficult. Change is painful. Change requires persistent minds. The government should invest more in the youths since they the ones who owe a large potion in the total population. The tendency of calling the youths leaders of tomorrow is gone. The youths are the leaders of today and many will be there in 2063 to witness the fulfillment of the vision. The youths should be empowered in every sector. In the Mega farms project implementation, the youths should take the lead. WHY? Because the youths of today have a wider knowledge on technology which will help them to use in Agriculture, education, mining all other sectors including energy sector which is the driving engine to development. Continue…other factors Availability of natural resources; Malawi is endowed with plenty of natural resources that can lead to industrialization. These natural resources are needed to help, make the products produced in the factories to stable markets that help businesses and the economy to grow. 7. Why can Malawi’s agriculture and mining sector lead to industrialization? Agriculture takes a bigger part in the national GDP but its not utilized the fullest. Agriculture sector needs to be effectively industrialized so to be able to produce more food which some will be used in manufacturing sector e.g. textiles manufacturing. A lot of feasibility studies show that Malawi has a lot of precious mineral resources that if used properly, can restore the lost economic glory of Malawi. Malawi University of Science and Technology (MUST) has to be used effectively in the mining sector rather than using external foreign companies to conducting feasibility studies. Recommendations and conclusion. In as far as Malawi 2063 is concerned to be achieved, the government of Malawi should embark on projects that are key to accelerating economic growth. The mindset change initiative has to be the daily song among the youths from the grassroots level, primary school pupils have to be taught about the future growth. Education system has to be changed from theoretical nature to application nature from primary through secondary schools to higher learning education. Malawians should join hands in arresting CORRUPTION because is the greatest enemy of progress and development. The youths should wake up against all political influence or interference in the public institutions functions. The Youths should resist handouts from politicians during campaigns to be elected during elections. There is a need to reborn the Malawi Development Corporations (MDCs) to overlook the process of industrialization. Lastly, ‘We cannot give excuses. We must simply develop this country.’ - Dr. Hastings Kamuzu Banda, 1969. AMBUYE ATITHANDIZE! THANK YOU !!
