Mixed bag

The quality of economic policies that the Malawi government has implemented to reduce poverty, promote sustainable growth and effectively use development assistance has marginally dropped in the past year, a report from the World Bank shows.

In its Country Policy and Institutional Assessment (CPIA) released on Wednesday, the World Bank downgraded Malawi’s score from 3.1 recorded last year to 3.0, representing a marginal drop of 0.1 on the score index.

According to the World Bank, the CPIA is a diagnostic tool that annually assesses the quality of policies and the performance of institutional frameworks in 54 African countries. The scores assess whether sustainable growth and poverty reduction can be supported through existing policy and institutional arrangements.

The assessment is based on four clusters; Economic Management, Structural Policies, Policies for Social Inclusion and Equity, and Public Sector Management and Institutions.

The report notes that Malawi performed well on Structural Policies and Policies for Social Inclusion and Equity, scoring 3.6 and 3.3, respectively.

However, the country performed poorly in Public Management Sector, Management and Economic Management clusters, scoring 2.9 and 2.2, respectively, lower than the IDA averages of 3.0 and 3.2.

It reads: “Macroeconomic management weakened, with challenges in fiscal policy, debt management, and quality of public financial management.  Public debt increased rapidly, driven by rising fiscal and external deficits.

“Public financial management is rated low, indicating issues with managing arrears and continued corruption. Moreover, progress in procurement and audit systems was limited.”

In a press statement released ahead of the report, World Bank chief economist for Africa Andrew Dabalen said the “comprehensiveness, and rigour of the Cpia review can help drive country engagements and underpin an evidence-based dialogue around countries’ reform agenda.”

Malawi’s performance on the four clusters suggests the country needs to improve on the Economic Management and Public Sector Management and Institution clusters.

Reacting to the report, Malawi University of Business and Applied Sciences associate professor of economics Betchani Tchereni said Malawi’s poor performance in the Cpia is a result of the country’s continued failure to implement the policies and strategies created to revamp the economy.

He said: “We have good policies, but we don’t implement them correctly. For instance, on fiscal policy, the government has developed austerity measures to reign in expenditure but does not implement them.

“It is the same thing with corruption. We need to deal with corruption instead of being seen to deal with corruption.”

In a separate interview, economic analyst Bond Mtembezeka urged local authorities to improve the implementation and coordination of policies to improve their performance, particularly in promoting economic growth and poverty reduction.

In a WhatsApp response, he said: “The effectiveness of any policy depends on three key factors; policy synchronisation, policy relevance and policy implementation. The policies have to be synchronised to ensure they speak to each other.

“Relevance relates to drafting the right policies at the right time and implementing the right intervention while implementation is about how the policies are executed. So, if we want to improve, all three areas have to be present.”