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Malawi’s erratic economic performance over the last decade can be attributed to weak economic and political governance, economic commentators say.
In its country assistance plan for Malawi, the British Department for International Development (DFID) says the country has serious shortcomings in policy management, weaknesses in basic service delivery and institutional shortcomings in responding to the interests of its citizens.
“Although there are reasonable prospects for boosting growth in Malawi, there remain significant concerns about willingness of government to adopt the measures required to do this,” it said.
Although the 2003/04 budget is built around the need for macroeconomic stability, DFID says there is a medium possibility that macroeconomic instability will persist.
“Levels of corruption and low accountability may deteriorate further between now and the presidential elections in 2004. There is a risk that the government may divert development resources for purely political processes,” it says.
“Unless government tackles corruption more aggressively, donors may conclude that scarce resources should be channelled elsewhere. The people of Malawi will also lose faith in government anti-corruption pronouncements.”
In its country economic memorandum of January this year, the World Bank says high levels of corruption are a major obstacle to conducting business in Malawi and the extent has worsened since 1999.
“Anti-corruption institutions suffer from lack of political support, low budgetary resources and a weak court system for effective prosecution,” it says.
During the post-budget consultative forum held in Lilongwe on Wednesday various people noted that government lacked the political will to implement desirable economic reforms.
“Most of the commitments that are in this year’s budget are not new but we have noted that there is no political will to implement reforms. When we have made a decision to move forward we should implement those decisions,” said Malawi Economic Justice Network (MEJN) national coordinator Collins Magalasi.
Ecama former president Alimon Mwase said while overexpenditure was an evil on its own, the problem in Malawi was the quality of expenditure.
He also said contrary to the impression that inflation in the country was going down, the fact is that it is going up at a lower rate than it did during the same period last year.
Press Corporation Limited chief executive Mathews Chikaonda said in an interview commitment to economic prudence has to come from the entire system.
“There should be ownership by everyone and hopefully the legislation that has just been passed will help control the situation. Of course any law is as good as the commitment to live by it but the fact that we have it is enough start. At least Treasury now has the teeth,” said Chikaonda, himself a former minister of Finance.
British High Commission Press and Political Affairs Officer Michael Nevin, while agreeing with Finance minister Friday Jumbe’s assertion during the post-budget forum that government had difficulties balancing the budget between protecting the poor and promoting growth, said the key is implementation.
“If government says, ‘look, as our figures show, we are committed to targeted and appropriate expenditure, but we need help,’ then donors will be happy to assist. The Ministry of Finance needs help to implement its budget measures —other ministers and ministries need to stick to their expenditure plans. It all boils down to leadership and commitment. If we all demonstrate it, Malawi can build on its good structures and environment,” he said.
Nevin, whose government is among the donors withholding budgetary support to Malawi, said it is up to government to create an environment that would make resumption of donor aid possible.
“As the UK, we would rather see, for example, 80 pence out of every pound working for development rather than the opposite ratio. When we are confident that government in its widest sense is committed to creating an environment for our assistance to be effective, we will gladly resume budget support. If the minister describes that a donor precondition, then surely it is a common sense precondition,” he said.
Malawi was taken off programmes with the IMF in 2000 because of failure to meet agreed targets and several other donors are withholding their support to the budget pending a return to the fund’s programme.
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