✓Austerity measures have failed before–CSAT
✓IMF expects improved discipline on expenditure–Jassi
✓Malawi now yoked into donor dependency–Bamusi
By Martha Kachingwe Phiri, LILONGWE
Government’s previous failure to strictly enforce some announced austerity measures to recover Malawi’s battered economy is compelling some economic commentators and accountability groups to cast doubts on the seriousness of President Lazarus Chakwera’s latest tough stance aimed at stopping careless expenditures.
Last evening, Chakwera made a strong statement targeting to seal any potential financial mismanagement following the approved four-year Extended Credit Facility-ECF program with the International Monetary Fund-IMF worth about $174 million.
Among others, he said he would no longer take on foreign trips until next year. He has also directed reduction of monthly fuel allocations to ministers, deputy ministers, principal secretaries, directors and their deputies by half.
Again, the Malawi leader has ordered ministers currently outside the country on public purse to cut short their trips and return home immediately.
However, commentators, while describing the address as powerful and offering some hope, doubt the successful implementation of the announced tough austerity measures.
For instance, Center for Social Accountability and Transparency, CSAT Executive Director Willy Kambwandira argues it’s very hard for Malawians to believe the president on this.
“Government has failed to walk the talk on the implementation of the austerity measures. It does not give confidence when the President has broken rules set by himself on austerity measures.
“Implementation of the austerity measures should begin with his office, otherwise we will not be surprised to learn government MDAs not implementing them,” says Kambwandira.
He thinks the president could do more on the measures including cutting on his budget, fighting corruption, and promoting transparency and accountability.
Economic commentator, Kingsley Jassi says the address is offering and we should expect improved discipline on expenditure, less borrowing, better prioritization and fiscal prudence.
“Perhaps, the President has realised that things cannot continue to go the way they’ve been going. But we should also not forget the IMF aspect on these measures.
“Actually, that’s what IMF does when you have a program with them, they make sure you control spending to the level of your revenue, other wise the program goes off track,” explains Jassi..
He hopes for improved macro economic environment and sustainability in a couple of months with the ECF and unlocked aid.
Jassi cautions: “But stability a lone is not enough. The country will need to build on that, when it is attained, to start improving the welfare of Malawians and that’s the most important part government should strive to do.”
In his reaction, economic governance expert Mabvuto Bamusi thinks Chakwera’s statement comes when the economy is already messed up with billions of kwacha blown up in the past three years through unnecessary spending including travels.
“Chakwera’s statement has finally put Malawi under the trap of IMF conditionalities which are proven not help in reducing poverty. Malawi is now yoked into deep donor dependency. This is a contradiction to the paradigm of shifting from aid to trade,” argues Bamusi.
He is not amused that Chakwera spent time praising the IMF and multilateral donors thanoutlining local-grown initiatives for economic productivity.
“It is not enough just to mention megafarms at the expense of other potential sectors for export led growth such as mining and tourism,” he stresses.
In its reaction, Centre for Democracy and Economic Development Initiatives-CDEDI argues Chakwera has failed to justify economic gains from his 40 plus international trips.
CDEDI Executive Director Sylvester Namiwa condemns what he calls “hypocrisy of asking Malawians to tighten their belts as he maintains a wasteful government through a larger than life cabinet and a crowd of advisers.”
He adds overliance on aid means Chakwera has no ideas to spur economic growth and he should accept or should be forced that he has failed.
Meanwhile, Human Rights Defenders Coalition-HRDC has asked the president to appoint a multistakeholder taskforce to see and track the implementation of these measures.
“The taskforce needs to be updating Malawians on how the measures are playing out, how much money is being saved and how it is being used to help Malawians,” says HRDC Chairperson Gift Trapence.
In July last year, President Chakwera also announced a cocktail of austerity measures after devaluing the kwacha by 25 percent. They included cutting by 20 percent fuel allowances for his Cabinet, restrictions on foreign travel and no movement of government vehicles after 6pm.
He added public officers would only be allowed to take three trips in the following did months and would fly economy class. But, this didn’t last long before the casual and careless spending on petties took center stage.