Introduction
On the evening of Friday, 8 May 2026, desperation overcame procedure.
After struggling to get an electricity connection for LAB20 INNOVATIONS LTD, we found ourselves in a tricky situation. We ended up paying K50,000 to someone who claimed to be an ESCOM technician. He seemed very convincing, explaining that the money was needed to buy electricity units for a three-phase meter he claimed he would install at our premises. To make matters more urgent, he mentioned that since Saturday was just around the corner, we had to get everything sorted out before the weekend. It all felt a bit rushed, and looking back, it was definitely a stressful experience.
Driven by the operational urgency of maintaining business continuity, payment was transferred via Airtel Money to a number registered to Robson Kanjuchi (0996650762). Shortly after the transfer, the number became unreachable.
At its core, this story revolves around fraud, but it also reveals deeper issues within our public service system. It highlights how the shortcomings of this system are giving rise to a parallel economy filled with middlemen, fixers, fraudsters, and informal facilitators, locally known as Madobadoba. These individuals navigate the cracks in the system, often exploiting the vulnerabilities and desperation of people seeking help. It’s a reflection of the struggles many face and the lengths they go to for solutions amid systemic failures.
The real issue is not simply that scammers exist. The real issue is this: Weak, delayed, and inefficient public service delivery is pushing citizens and businesses into desperate decisions that sustain an informal economy operating outside the formal state system.
The rise of the informal service economy
Across Malawi, ordinary citizens increasingly perceive formal public service systems as slow, unpredictable, bureaucratic and often inaccessible without personal connections
As a result, informal intermediaries have emerged around nearly every major public institution:
- ESCOM
- Water Boards
- Road Traffic Directorate
- Immigration
- Police
- Court systems
- Public hospitals
- Land registries
These intermediaries survive because they exploit a simple reality: People are willing to pay extra to bypass inefficiency, uncertainty, and delay.
This creates a shadow economy around public services. The “Madobadoba” economy thrives because systems are slow, information is opaque, accountability is weak, and citizens are desperate.
For businesses, delays are costly. A delayed electricity connection means halted production, missed customer deadlines, reduced revenue and operational instability. In such circumstances, paying an unofficial “facilitation fee” becomes economically rational, even if risky. This is how desperation becomes vulnerability.
And that vulnerability sustains a growing informal service economy operating alongside formal state institutions.
The Political Economy of desperation.
The incident involving the fake ESCOM technician is not an isolated case. It reflects a broader structural problem in Malawi’s governance system, as public institutions are often under-capacitated: service delivery processes are fragmented and bureaucratic procedures are difficult to navigate.
For our business, delays are costly. Electricity is not a luxury; it is an operational infrastructure. Every day without power means lost production, delayed orders, reduced cash flow and frustrated customers. In such a context, paying K50,000 to “speed things up” becomes economically rational, even if procedurally risky.
This is how desperation transforms into vulnerability. And this vulnerability sustains an informal system operating alongside the formal state. Middlemen exploit information asymmetry, institutional opacity and desperation. The result is a shadow system where official processes exist formally, but informal channels increasingly determine outcomes. This creates a dangerous normalisation: People begin trusting middlemen more than institutions. Once this happens, institutional legitimacy begins to erode.
How informal corruption weakens the economy
The effects of this system go far beyond individual losses. The money flowing into these informal networks is untaxed, unrecorded, unproductive, and outside formal financial systems.
Economically, this creates several problems.
Informal revenue channels undermine formal systems by bypassing taxes and official fees, resulting in a loss of resources for public institutions and hindering service delivery. This normalisation of intermediaries fosters rent-seeking behaviour, where inefficiency becomes valuable as delays create opportunities for informal payments. Consequently, businesses face increased operational costs from formal fees and informal “facilitation” expenses, which reduce their competitiveness. Over time, this erodes trust in institutions, as citizens begin to doubt the fairness and effectiveness of procedures, turning instead to individuals with connections for assistance.
How institutional inefficiency creates corruption.
The rise of informal systems isn’t just a coincidence. It often occurs when public institutions struggle to deliver efficient, reliable services. In many cases, these institutions have unclear processes, inconsistent timelines, poor communication, and weak accountability. This creates a situation in which informal actors fill the gap, stepping up as “problem solvers” to navigate the challenges that arise. When the official system falls short, people turn to those who offer quick, effective solutions, even if they’re outside the established framework.
People across sectors are feeling the pinch of inefficiencies, prompting them to turn to unofficial channels for faster service. At ESCOM, for example, many are frustrated by long delays in getting connected, slow fault response times, and a lack of clear communication. This has led some to seek help from unofficial intermediaries who expedite matters.
Water Boards are experiencing a similar trend, with individuals relying on middlemen to speed up new water connections, reconnections, and even billing corrections. The Road Traffic Directorate is not immune either; people often encounter hurdles in processing licences, registering vehicles, and paying road tax, which pushes them to engage intermediaries for faster resolution.
Public hospitals face similar challenges. Patients frequently feel pressured to make unofficial payments to receive quicker medical attention or move more swiftly through often overcrowded systems. These patterns aren’t isolated; they extend to police stations, court systems, and land administration offices, highlighting a broader issue: inefficiencies in essential services force people to pay extra to get the help they need.
The macroeconomic cost of informal corruption
The effects of this system extend far beyond individual incidents of fraud. Money flowing into informal systems bypasses taxation and official revenue channels, remaining outside productive financial circulation. Economically, this creates several distortions.
Public institutions face significant revenue losses from informal payments that could have otherwise been utilised to enhance services. This issue exacerbates the already fragile capacity of the state, limiting its ability to function effectively. As a result, the reliance on informal payments undermines the quality of public services that citizens depend on.
The presence of informal payments also increases transaction costs for businesses, which must cover both official fees and unofficial costs. This dual burden adversely affects competitiveness and discourages potential investments, creating a less attractive environment for business growth and economic development.
Moreover, the rise of informal payments fosters inefficiency within systems. Middlemen benefit from systemic delays and opacity, which diminishes the motivation to enhance operational efficiency. Trust in formal institutions deteriorates as citizens perceive that procedures are unimportant, systems are unfair, and outcomes hinge on informal access rather than established rules, ultimately weakening the foundations necessary for economic transformation.
The ESCOM example and Malawi’s development challenge
The ESCOM incident highlights a significant developmental issue regarding electricity, which serves as vital productive infrastructure rather than just a household service. Various sectors, including manufacturing, printing, refrigeration, and digital systems, rely heavily on a consistent power supply. When access to electricity is slow and unreliable, businesses find themselves in a precarious position, often compelled to operate informally, which can stifle their growth.
This instability in electricity access undermines key aspects of the economy, including industrial growth, entrepreneurship, productivity, and investment confidence. Sustainable industrialisation cannot occur when basic infrastructure is contingent on informal networks and intermediaries, creating a detrimental cycle that hampers economic development.
Recommendations
The solution to combatting fraud extends beyond merely arresting those involved; it requires addressing the underlying conditions that make informal systems appealing. To achieve this, public institutions need to become faster, more transparent, digitised, and accountable. Emphasising digitisation is crucial, as online applications, tracking systems, automated payments, and digital verification minimise the role of intermediaries and reduce opportunities for corruption.
Additionally, institutions should proactively publish official fees and service timelines, strengthen complaints mechanisms, and conduct thorough investigations into cases of insider collusion. Ultimately, the focus must also be on enhancing service delivery to build a trustworthy and efficient system.
Because: Where institutions fail to deliver efficiently, informal systems inevitably emerge to replace them.
Conclusion
The K50,000 lost to a fake ESCOM technician highlights a broader governance and economic issue rather than being an isolated incident. It underscores the consequences of weak public service delivery, which fosters desperation, informality, and institutional distrust among the populace.
This “Madobadoba economy” thrives in regions where the formal state fails to function effectively, demonstrating that it operates not by happenstance but through systemic shortcomings. These conditions allow such scams to proliferate, revealing the urgent need for improved governance and accountability.
Closing reflection
Fraudsters take advantage of weak systems, and until we establish public institutions that are efficient, transparent, predictable, and trusted, citizens and businesses will continue to bear the hidden tax of desperation.
The real threat we face isn’t just the financial losses to scammers; it’s the possibility of living in a society where people trust informal systems more than they do our government and institutions. This shift undermines the very foundation of our society, making it harder for us to come together and solve problems collectively. It’s a wake-up call to ensure our systems are reliable, deliver on time and trustworthy.
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