Govt maintains ERP on course despite cashgate
Minister of Economic Planning and Development Ralph Jooma has said implementation of the Economic Recovery Plan (ERP) is on track and has not been derailed by the recent revelation of massive public funds plunder, at Capital Hill, popularly called cashgate.
Jooma told Business News in an interview on Thursday in response to fears by many social and economic commentators that the document, launched last year on September 28, might have been left gathering dust on shelves at Capital Hill as government shifts focus to addressing cashgate.
“A lot of people think with cashgate, ERP is affected, but I can assure you that the document is not affected and its implementation is on track,” Jooma said.
ERP outlined a set of immediate, short and medium-term policy reforms aimed at restoring the external and internal economic stability following the economy’s fragility, notably during the second term of the former president the late Bingu wa Mutharika.
The plan, which government described as urgent in the wake of worsening economic situation then, also proposed measures aimed at cushioning vulnerable Malawians from the impact of economic reforms, especially the exchange rate policy adjustment.
Added Jooma: “People may be asking why is it that government is busy implementing ERP when on one hand money was stolen? ERP and cashgate are independent of each other. Even if the stolen money is K9 billion from the budget is a bigger amount but the effect is being enhanced by the consequences such as the withholding of donor money.”
He said to cushion from the adverse effects of donor aid freeze in the wake of cashgate revelations, government has modified the budget in a careful manner to avoid affecting substantial ERP projects.
The minister also boasted that on the macroeconomic front, ERP has yielded results citing the availability of foreign exchange in the country and also fuel.
Jooma also explained that the social support components of ERP have seen the welfare of most vulnerable Malawians being uplifted.
“Then in energy we are a talking of Kapichira II project whose works have been completed and we hope before Christmas our President will officially launch this project which will add 64 megawatts to our national grid,” added Jooma.
According to Jooma, the country will soon witness the commissioning of a coal fired power plant saying government officials have just returned from China to conclude discussions on the same.
The minister also assured that delays in budget support will not affect the implementation of other projects under ERP as project support from donors is still intact.
“I ask Malawians not to panic because even the current depreciation of the kwacha is just temporary as you know we are in lean season but we have enough foreign reserves that can last us for two months of import cover,” added Jooma.
According to a latest economic report by Nico Asset Managers released on Tuesday, lack of donor funds may hamper government reform efforts as government revenue will not be sufficient to sustain the programmes.
On November 20, this year, IMF Mission Chief for Malawi Tsidi Tsikata said the policy reforms initiated in May 2012 have produced positive results.
