Start talking to donors, Mr President!

Hon. Folks, did IMF suggest Malawi should renegotiate with donors? Adhering to this advice could be politically embarrassing to APM who is on record as having said we are managing just fine without direct budgetary support.

His populist ant-aid spin is to acknowledge as patriots those who say Malawi should throw away the beggar’s bowl. These proponents of economic sovereignty at any cost are driven by the shame of being an independent nation for 53 years while economically remaining a baby wiping its nose with the back its hand.

Some of the folks in this camp have peddled theories that aid is a donor tool for keeping us under the bondage of neo-colonialism.  Others have even went to the extent of looking at aid through a classroom window, citing the works of scholars who have argued that aid has little, if any, impact on poverty.

They rightly argue that our future is in our hands and that if we can change the mindset, think outside box and break sweat, we have in abundance resources that we can use to be food secure, develop our country and improve our living standards.

To all APM added the theory of banking on loans to fund our development agenda.  When Cashgate resulted in abrupt budgetary support exist from Malawi and donors opting for funding relief and development programmes through non-budgetary channels, government increasingly looked to China and India for loans.

Local economists have also generally supported borrowing; saying loans are justified if incurred for investment. Unfortunately, our curse where loans are concerned isn’t so much on whether government is borrowing wisely or unwisely.

Rather, it’s on its failure to use the loans effectively and efficiently. There is very little to show for loans from India meant for the Green Belt Initiative. The tractors and other farm machinery bought inexplicably ended up in the backyard of the elite as family assets. What’s for us to settle is the debt and the interest it attracts.

The same is true of the loans for the construction of roads and other infrastructural projects. The projects linger on way beyond the duration and cost overruns are regarded as normal. What really matters is having the road as proof of chitukuko (development) to point at in election times. Who cares about using loans effectively and efficiently?

But IMF deputy director for the African Department Michael Atingi-Ego, while in the country recently for stakeholder discussions on the Extended Credit Facility (ECF), disabused the APM government of banking too much on loans for financing its development agenda.

He noted that as a country at “moderate risk of debt distress”, Malawi doesn’t have the capacity to borrow substantial amounts for fixing of its bareback infrastructural patches. His suggested way forward: re-engage donors.

There’s no denying that Malawi is a beautiful country endowed with nice weather, good fertile land and an expanse of fresh water covering its entire length from Karonga to Nsanje. There are precious stones as well as fauna and flora that can all be monetised.

But any point in the value chain—be it maximising production, conserving the environment,  preserving  harvest, packaging, labelling transportation or marketing , etc—requires knowledge, skills and capital.

The fact is that knowledge and skills are paltry, especially at the subsistent level where the majority are crammed, and capital is virtually non-existent. To wean ourselves from donors now, when draught and floods can result in up to 40 percent of the population being food-insecure, is suicidal.

In fact, the more time we waste hating donors and denying inefficiency, inertia and corruption, the worse our situation would be by the time we wake up. We are too poor to stand alone and produce competitively.

Wake up APM and start talking in earnest to donors!

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