Patronage in MDAs hinders economic growth

Vested political interests and the dominance of power brokers in strategic government ministries, departments and agencies (MDAs) as well as State-Owned Enterprises (SOEs) has created inefficient systems that cripple the country’s economic growth, the World Bank has said.

In its latest edition of the Country Economic Memorandum released last week, the World Bank said power broker elites and rent-seeking behaviour have dominated government business and contracts.

Reads the report in part: “The power brokers use their connections to shape policy to their advantage.

“Policymakers often oblige as they need power broker rents to sustain their political machinery and for personal gains.”

Agreeing with the report, Malawi University of Science and Technology economics lecturer Bertha Bangara Chikadza said enhancing tax collection, widening the tax base and closing revenue slippages could create “ample fiscal space”.

In an interview, comptroller of statutory corporations Peter Simbani said government has already taken steps to improve the financial position of SOEs by clearing their arrears.

The Malawi Government Annual Economic Report 2023 showed that in the past five years, out of a projected K164 billion, parastatals only remitted K82.2 billion, thereby missing their target by K81 billion.