Time to move on, grow the economy

Now that we have new Executive leadership in place, Malawians can breathe a sigh of relief. The storm that characterised the aftermath of the May 20 Tripartite Elections is surely over. It is time to move on and build our economy, our country.

Congratulations to President Peter Mutharika and Vice-President Saulos Chilima for winning the race. It is my expectation and that of many Malawians that you will deliver on your campaign promises.

To those that did not make it, do an honest soul-searching on what could have gone wrong. But, at the end of the day, as Malawi Congress Party (MCP) presidential candidate Lazarus Chakwera said, there can only be one President at a time: “We now bow to the reality of the present situation and say let us move on. Let us keep peace. There can only be one President at a time.”

To the winning team, there are several challenges facing our economy that need to be worked on. Key among the issues is the suspension of budget support by our development partners under the Common Approach to Budget Support (Cabs) who withheld about $150 million last November in protest over the plunder of public funds at Capital Hill through dubious payments in what has been christened Cashgate.

Being an election year, donors indicated they would resume budget support after the elections. The effect of withholding of the support was that many government ministries and departments suffered cuts in their monthly allocations. In many cases, these cuts effectively suffocated operations. Sadly, there was no mid-year budget review to assess the funding gaps and their impact.

Memories are still fresh among many Malawians of the zero-deficit budget (ZDB) introduced by Democratic Progressive Party (DPP) under Peter’s brother, the late Bingu wa Mutharika. The economy that was on the fast-lane of growth suddenly ground to a halt, strangling businesses as there was no foreign exchange to import raw materials, fuel, drugs and other essential items.

Personally, I have always said that there is nothing wrong with a ZDB or zero-donor support budget as advocated by the just voted out People’s Party (PP) administration led by Joyce Banda. For a country that is clocking 50 years of independence this July 6, economic independence should be the way to go. After all, they say life begins at 40 and we are a decade late!

What I have been against is the manner in which we have tended to take the financial independence path. We have always been reactionary, with no proper exit strategy. For example, during the Bingu era, we went for ZDB after donors had suspended budget support as they did last November.

We have discussed these things before, including their pros and cons. When all is said and done, implementing a successful ZDB or zero-donor support budget is possible with financial discipline and restructuring of some of our expenditure lines.

I have always wondered why a country with 24 ministries should have 65 principal secretaries? Why should we have such a big Cabinet? In fact, some of the ministries can easily be streamlined or merged to cut costs.

This time around, it is refreshing to hear the new President maintaining his campaign promise to hire a 20-member Cabinet. That is the way to go.

Currently, donors support 40 percent of our recurrent budget and 80 percent of the development budget. But, given available data that at least 30 percent of allocations approved in the national budget go into people’s pockets, with prudence and discipline, Malawi can attain the dignity of paying for her own bills.

Financing our budgets with local resources has great potential to restructure the economy to be resilient to external shocks. It is very important to have a stable economy as this helps businesses and the country at large to plan effectively.

When embarking on the economic independence path, the key lies in implementation. It should be planned and gradual. Currently, we are at 40 percent in donor support. We need to plan when to reach the 30 percent mark, then 20 percent and eventually zero percent. This is possible with political will and fiscal discipline.