Africa-Press – Malawi. In a landmark ruling, the High Court has delivered a decisive blow to regulatory overreach, declaring that the Competition and Fair-Trading Commission (CFTC) acted outside its legal mandate when it attempted to freeze fertilizer prices by targeting ETG Inputs Limited.
The ruling, which has sent shockwaves through Malawi’s business community, reinforces the supremacy of market forces over regulatory interference, particularly in times of economic strain.
Justice Trouble Kalua, presiding over the case, ruled that the CFTC failed to establish a credible basis for its action and grossly violated due process. The court declared that the commission’s interim order—issued in January to stop ETG from raising fertilizer prices—was unlawful.
Regulator Overstepped, Says Court
ETG Inputs Limited, one of Malawi’s major fertilizer suppliers, challenged the CFTC’s directive in court, warning that the imposed price controls were not only outside the regulator’s powers but threatened to destabilize the country’s already fragile fertilizer supply chain.
“The market is free and not subject to price control,” argued ETG Director Ashish Lakhotia in a sworn affidavit. “Artificially forcing companies to sell below market value is unsustainable and will lead to supply shortages.”
Justice Kalua agreed, stressing that the commission jumped the gun and failed to give ETG a fair hearing before clamping down on its pricing.
“No person is to be condemned unheard,” Kalua stated pointedly. “The CFTC violated procedural fairness and failed to demonstrate how ETG’s pricing constituted exploitation.”
Flawed Evidence, Flawed Intervention
The CFTC had anchored its argument on a COMESA report showing that Malawi’s fertilizer prices were among the highest in East and Southern Africa. The commission also cited reduced competition in the sector, following recent mergers.
But ETG punched holes in this argument, noting that the report generalized regional trends without drilling into Malawi’s unique market conditions. Justice Kalua concurred.
“The fact that the product is cheaper in Zambia, for instance, does not help us,” he remarked. “Different countries operate under different economic circumstances—lower fuel or storage costs, for example.”
The court went further, calling out the regulator for exceeding its statutory mandate.
“The Commission attempted to impose price controls where none exist in law,” Kalua ruled. “An increase in price, on its own, does not constitute excessive pricing. It requires a thorough cost-based and market-based analysis.”
Victory for Free Market – But Consumers Wary
With the interim order now overturned, ETG Inputs Limited is free to adjust prices based on prevailing market forces, setting a powerful precedent that limits the scope of regulatory action in Malawi’s commercial space.
For businesses, this ruling is being hailed as a win for free enterprise and a signal that regulators must tread carefully when intervening in competitive markets.
However, for many consumers and smallholder farmers—who are already grappling with soaring input costs amid foreign exchange shortages and inflation—the ruling brings unease. Fertilizer prices directly affect food security, and the fear of price spikes remains.
The Bigger Picture: A Balancing Act
The judgment exposes a growing tension in Malawi: how to protect consumers from runaway prices while safeguarding the integrity of the free market. Industry watchers say the CFTC must return to the drawing board, improve its investigative rigor, and ensure future actions are grounded in both strong evidence and legal authority.
As Malawi navigates mounting economic headwinds, Justice Kalua’s ruling is a stark reminder: regulation without due diligence risks doing more harm than good.
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