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Malawi’s recovery plan lacks clarity, focus’

A business analyst on Thursday tore into Malawi’s Economic Recovery Plan (ERP), arguing it may not serve its purpose because it lacks clarity and focus.

Vice-President Khumbo Kachali last month launched the ERP—expected to be implemented in 18 months. It focuses on five pillars: energy, tourism, mining, agriculture and transport infrastructure and ICT, with the hope of resuscitating Malawi’s ailing economy characterised by rising inflation, high interest rates and a weakening kwacha which was devalued on May 7 and subsequently floated.

Government envisages that the implementation of the plan largely depends on donors and cooperating partners for technical and financial support while Civil Society Organisations (CSOs) and the private sector are expected to implement specific activities and provide oversight and accountability functions.

But Business Consult Africa (BCA) managing director Henry Kachaje, speaking at the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chapter meeting for the Southern Region held to provide insights into the plan, observed that recovery signifies that one is in a grave situation that they want to come out of.

Said Kachaje: “The document is framed as if there is no crisis. It generally lacks clarity, it is not focused and it does not say who is going to champion the implementation process. It does mention the Office of President and Cabinet (OPC), but who exactly is OPC? Is it the President, ministers?

“If the ERP is implemented the way it is, it may not work as a recovery plan. It cannot succeed in reversing the current economic trend. Apart from that, the private sector is not specifically mentioned as a player in the plan when the private sector is supposed to be a big player in a country’s economic growth.”

MCCCI chief executive officer Chancellor Kaferapanjira, however, noted that based on sentiments from chapter members, it is clear the private sector believes it is a good decision by government to have a recovery plan.

Kaferapanjira said the plan has some good provisions, but argued there is more that needs to be done.

He pointed out that a lot of areas that have shortfalls were highlighted at an earlier meeting and the Chamber would make proposals using the input from the members and forward them to government.

Said Kaferapanjira: “Overall, the idea of having an economic recovery plan, especially in the face of what the country’s economy is going through, is a good one. Some of the specific issues that were mentioned were that the ERP needs to go a bit further than just stating what they want to do.”

Kaferapanjira said the plan has to be specific in terms of targets, when they are going to be achieved, and who is going to be accountable for the activities.

He bemoaned the lack of a champion for the plan.

“It is indicated that OPC is responsible, but we want a specific office within OPC because OPC is very big. The private sector is looking for specific champions rather than just saying OPC,” said Kaferapanjira. He said from proposals that came out of the earlier meeting, the Vice-President should be in-charge of the plan implementation so that the private sector knows who is to be held accountable for its implementation.

The MCCCI boss also said what is not clear in the plan are the specific dates for implementation, stressing that it just indicates that “in three months or one year this is what government will do.”

Kaferapanjira also observed that it would not be right to say that what is in the plan was already available because some points have been refined.

He said government does not have to change everything which was already there because they are running a government, but that all they need is to make sure there is prioritisation of issues to ensure that the current challenges are addressed.

In an earlier interview with The Nation, Economic Planning and Development Minister Atupele Muluzi said the plan proposes measures to cushion the vulnerable from the impact of any reforms, particularly the exchange rate policy.

He said the private sector and non-State actors have roles to play in the ERP, explaining that financing arrangements for the plan are contained in the 2012/13 budget in the five priority sectors and what the donors are providing through parallel financing, budget support and on budget financing.

Said Muluzi: “The implementation of the ERP in the immediate and short-term is through the 2012/13 annual budget which was passed in Parliament. So, in effect, the implementation of the ERP began with implementation of the budget.

“The ERP’s purpose is to ramp up ongoing efforts in the annual budget and the MGDS [Malawi Growth and Development Strategy II) to stabilise the economy while cushioning Malawians from the unintended effects over the past few months.”

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