I flew from Dulles to Ethiopia in a Boeing 777 which I knew was a big plane. When we arrived in Ethiopia they had us get off and walk down a portable stairway and I got to stand underneath the massive plane. The engine was the size of a fire truck, no joke. You could have a small cocktail party inside the exhaust. I imagine that a plane like that flies half way around the world uses a ridiculous amount of fuel (despite what the pamphlet on board told me). When I skipped on to Malawi via the DRC, it was plain to see how much the country has been affected by this recent fuel shortage.
Malawi imports almost everything. From fuel to forks, this country barely produces anything on its own for its self. You can only imagine the problems that come about when the transportation of these goods into the country comes to almost a complete stop because there is no gas to feed to the massive trucks. Everything is more expensive, by a lot (except gas, but I’ll get to that). Not only that but there are less “things” in the country because they are not being imported. Griffin and I spent an hour going from shop to shop looking for 3 inch flat head screws for the beds being built in M’Pamila. We were told that there were none anywhere. The city was “fresh” out (we ended up with 3 inch phillips head screws and a new screw driver).
More apparent to anyone in the city is the long long lines at each gas station. In these lines you had four distinct groups. First was the typical frustrated motorist who just wants a full tank in case the gas goes for good then at least they have this last tank. Then there is the small time black market entrepreneur who has got his hands on as many small containers he could find so that when the gas runs dry he can sell it on the side of the road for well over twice the rate the gas station sold it to him. Then there is the established black market tycoon who is not only filling up his own truck, but he is also filling the three 50 gallon drums in the flatbed. This guy is wearing mirrored sunglasses and is tipping the station attendant. As we slowly snailed our way through the queue we had to maneuver around at least four 18 wheelers stopped in the line. Unfortunately, diesel gas has gone the way of the 3 inch flat head screw. The created more than one tragic dynamic. First and foremost, these are the trucks that bring all the goods into the country. When they have run dry on diesel fuel then less and less can be brought into the country. No goods means simply no good. Second and truly sad, are the gas tankers that heroically brought the precious fuel (the newspaper on Saturday proclaimed on the front page in bold letters the arrival of 83 tanker into the country) now cannot leave to go back for more because there was no fuel for them. So there they were, sleeping quietly along the side of the road as while we patiently slipped by to fill our gas tank. The shear madness of it was a little funny at the time, but it seems to be boiling over to something more if nothing is done. The diesel arrived today (Sunday) and hopefully things for now are turning again. I asked the gas attendant today how long it was going to last and he said that they would have fuel to sell on Monday but after that it would be gone. I asked him if he knew when more would be coming and he smiled and opened his arms. “Its crazy!” he said.
This problem has several culprits to blame. When I read about this problem on the internet I guessed the villain was the government’s restriction on the value of the Kwacha on the foreign exchange market. When the government refuses to devalue the Kwacha to its natural value, anyone who does official business loses money every time they do business in Malawi. While the black market is selling 185 Kwacha for every US dollar, those doing official business is only getting a rate of 150. If you are doing business in 5 or 6 digit numbers, you are losing a ton of money. So why would you want to do business when that is the situation. So one would figure that was the reason why fuel wasn’t flowing into the country. As convincing as this was to a small minded economist like myself, it turned out to be for the most part wrong. While this Kwacha value problem was for the most part annoying to foreign importers, it has been that way for a while and it is not too much of a deterrent since there is such a huge demand for goods.
No, what seems to be real reason why there is no gas is simply a case of miscalculation and forgetting to carry the four somewhere in the gas equation. Malawi, like I said, imports just about everything. Included in “everything” are cars. Malawi has seen a massive influx of cars in the past three years from Tanzania, U.A.E., and most of all, South Africa. Something like 3,000 cars are coming into the country every month, a tremendous number compared to where it was four years ago. However, while the government collected the duty costs for each of these vehicles that came into the country (Woo-hoo $$!!!) there was nothing done to accommodate these vehicles. This includes the amount of gas that was set to come into the country (as well as the condition and the quality if the roads that are seeing much more traffic in the past three years). On top of that, while the government tries to solve this problem, they continue to keep the cost of fuel low so that it is swallowed up a day or two after it arrives in the country. Instead of letting the law of supply and demand take over to self ration the fuel, it has allowed the black marketeers to take over. While the general consensus is anger and frustration that the black marketers are allowed to load up when gas becomes available, there is little push back and nothing seems to be done.
As the gas station attendant told me “Its crazy”.