we need change of mindset — Goodall

The depreciation of the country’s currency, coupled with high inflation figures, is putting to question President Peter Mutharika’s economic leadership. This, experts argue, can have drastic consequences on how they view Mutharika’s political leadership.  EPHRAIM NYONDO sat down with Finance Minister Goodall Gondwe to get his views regarding the management of the country’s economy.
Q
: Would you briefly describe the country’s economy right now?

A
: We are passing through the most difficult times. Inflation is high. We are experiencing a depreciation of the kwacha.  At the same time, budgetary support—which provides foreign exchange for balance of payment—has not been available. However, I should be quick to underline that, as government, we are working hard. The bottom line is that each one of us, led by government of course, must improve management of finances.
Q
: Would you explain further on the ‘improvement of finance management’?
A
: I know I will not be popular on this, but I have to say it anyway. You see, compared to other countries, Malawians have a very sophisticated consuming habit. Therefore, we require more and more resources to acquire that. But we do not work hard to get that money. We need a mindset shift to get to a point where we should balance the two.
Q
: Most Malawians are struggling even to meet their basic needs. What kind of consumption are you referring to?
A
: On consuming basic needs I think we are doing fine. But there are things that one can do without. For instance, does one in Malawi need to have more than two cars? Does a young man fresh from university require a posh car? If you go to Capital Hill, today, you will find a fleet of cars owned by people who cannot afford them. If that is our ambition, then we need to have more money and work for it. Yet we do not have that. We may have to change. I know, of course, it will take time.
Q
: In the past weeks we have seen the kwacha depreciating. Should we say that your government is in control?
A
: What we have, certainly, is a very sharp depreciation. Usually, that means we have a lot more kwachas chasing fewer US dollars. We have to do something to reduce the kwachas in the economy.  We will do that. I expect that if we do that in time, we will have an improvement on the rate.
Q
: How soon should Malawians expect the appreciation of the kwacha?
A
:  You know these things have been seasonal. This is not the first time we are seeing depreciation at this particular time of the year. We usually have it. This year, I think, it has been more pronounced than other years. I expect that seasonally, when we a see a climb up, things will return to normal. We just need to work hard to get as much foreign exchange as possible
Q
: Last week, the British House of Lords urged government to do an audit report starting 2005 as part of the condition of aid resumption. How has government received this news?
A
:  I have always said that we need to do a thorough review of our financial systems. But we will not do it because the British want to give us more money. We are going to do it because we have to do it. Yes, they want us to do an audit of ourselves since 2005. We were going to do it anyway without the British telling us that. Because there are two ways into this aspect. One, and this is what is happening now, where we are looking for people who have squandered the money and bring them to book. And two, which is more important, we need to make sure that we put in place strong systems to deter another Cashgate
Q
: But does government have sufficient resources to achieve those two aspects?
A
:  It is not possible to say you have enough resources. But if you decide to tailor your expenditure according to your resources, you will have sufficient resources. We have a budget right now which relies very much on the resources we have. It is possible to do it. It will be painful but possible to it. Do we have sufficient resources? Yes and no.
Q
: How soon will government clear the Cashgate mess?
A
:  It will take time. As I said there are two things involved. One is to catch the thief and bring him or her to book. This probably will not take time. But the more important thing, as I indicated earlier, is to review and reform our system so that Cashgate does not happen again. This will take some time. It is a question of mindset, as I said, among the civil service and others respecting the rules as spelled out in the books of guidance.
Q
: Any other words?
A
:  Perhaps I should reiterate that though we are going through difficult times, as government we are doing all we can to improve the situation. However, government cannot achieve this alone. We need everybody’s hand.