Flotation or suicide, make your pick

Honourable Folks, if Cama demonstrations slated for January 17 are meant to protest the flotation of the kwacha, then there is no escaping the question: What’s the alternative?

If I remember very well, both the flotation and the all-at-once heavy devaluation of the kwacha by 49 percent were not optional in the discussions between government and IMF leading to the resumption of the Extended Credit Facility (ECF) programme.

The Malawi delegation to the negotiations, at the risk of burning their fingers during the reign of Mutharika, championed phased devaluation. The former president was opposed to any form of devaluation, challenging those who supported devaluation to resign from his government.

Of course, IMF had no time for the paranoid stand of Mutharika. But it also was vehemently opposed to phased devaluation, saying only reforms in full measure would help restore confidence in our battered economy.

In other words, at the point of restoring the ECF, our government could not be trusted to responsibly manage the movement of the kwacha by any other means than flotation.

With the ECF programme in place, aid has resumed and there is no denying the remarkable difference it has made both to the national budget and the easing of forex shortage.

As a country whose economic recovery agenda—whether now or during the Mutharika administration—remains work in progress, we cannot do without aid which make up over 30 percent of our budget, at least not until we are able to generate enough wealth on our own to replace it.

While it is within the constitutional right of Cama and other NGOs to organise demonstrations against flotation of the kwacha, these civil society organisations should not underestimate what is at risk if de-flotation were to happen—the ECF and the goodwill and support of other donors. 

I know very well the argument that donor aid cannot grow our economy. But the question rather is: Can we grow the economy without the support of donors? Mutharika’s version of zero-deficit budget made it more—and not—less dependent on donors. That is a fact.

Rather than demand de-flotation, Cama should protest if the JB administration is not addressing issues that can put the economy back on course and make consumers, who are indeed suffering the pangs of devaluation, flotation and the subsequent rising cost of commodities, see light at the end of the tunnel.

The point is that our suffering is an inevitable consequence of the serious economic mistakes made by our former elected president Mutharika. His decisions reversed our sterling economic record registered between 2005 and 2011 during which the economy was growing at the rate of 7.5 percent and above. Now the economy is expected to grow by a paltry less that 2 percent against Africa’s average of 5 percent.

When elected leaders let power corrupt them, they make self-serving decisions for which the poor electorate pay the price. We are paying the price for mistakes made by Mutharika. That we cannot escape.

We also paid for the mistakes made by other former leaders, Bakili Muluzi and Kamuzu Banda. They came, made us work hard, invested the fruit of our sweat in white elephant projects that benefited them and their cronies at our expense, and left us poorer.

Cama will be serving the best interests of consumers by ensuring that the JB administration does not perpetuate the culture of giving them a raw deal.

If government is extravagant, nepotistic, unaccountable to the people, or if it does not address the high rate of corruption—estimated to be draining 30 percent of public revenue every year—Cama should mobilise us to protest.

If government is doing nothing about the sorry state of our loss making parastatals, opting to tax the people more in order to run them instead, Cama should mobilise us to protest.

But Cama should not mobilise us to protest the flotation of the kwacha unless there is a better alternative to the managing the economy which government has ignored. Hopefully, as ultimate stakeholders, Cama shall tell the consumers what that alternative is before January 17.

If not, let’s stay away and do our part in ensuring economic recovery—working hard and honestly in every field of developmental endeavour. I wish you all a happy, peaceful and prosperous New Year!