Last month, Zain Malawi increased its airtime prices by about 18%. The Consumer Association of Malawi (CAMA) was quick to observe that this increase came just after the Kwacha has depreciated.

Because Zain Malawi’s airtime is priced in US dollar, it was not possible for the rates to remain the same; they had to go up. In other words, had the Malawi Kwacha not lost ground against the US Dollar, Zain Malawi would not have raised its rates.

CAMA Executive Director John Kapito has asked the central bank to penalise Zain for discreetly pegging its rates to the United States dollar, describing the practices as illegal.

Zain Managing Director Fayaz King has responded by saying that the price hike was long over due. He says despite prices of all its production needs, including fuel, electricity, water, salaries, rentals and others going up several times since 2005, its rates never increased.

Although Mr. King’s defence makes sense, I am surprised because he does not say anything about why his company ties its rates to the US dollar. Why should Malawi residents be paying for local services in US dollar? Why are these mobile operators undermining our local currency?

It is quite interesting to observe that Zain Malawi has not increased its rates for the past five years and that, during the same period, the Malawi Kwacha has been stable at MK140.00 against the US dollar. This further confirms that Mr. Kapito’s observation is correct. Zain Malawi could not increase its rates while the Malawi Kwacha was stable.

Normally, when production costs increase, companies also increase the cost of their services. It is very easy for customers and organizations such as CAMA to understand such increases.

The fact that Zain could not increase its rates in light of increasing production costs seems to suggest that these rates are already high enough for its survival. After all, air time rates in Malawi are the highest in the region.

I have stayed in South Africa and now I am here in Japan. In both countries, residents pay for these services in South African Rand and Japanese Yen respectively. I, therefore, would like to join Mr. Kapito and his team at CAMA in asking the central bank to penalize Zain Malawi and other service providers that price their services in foreign currencies.

Once in Malawi, everything must be priced in Malawi Kwacha! Even my kinsmen in Usowoya price their honey, Irish potatoes, tomatoes, bananas etc. in Malawi Kwacha!