Economic experts are asking government to stop relying wholly on prescriptions made by the International Monetary Fund (IMF) on how to bring the economy back to financial health when solutions to the challenges facing the country are within the country.
The experts argue that economic policies need to be made by Malawian economists and not the Bretton woods institution if they are to succeed in turning around the economy and be sustainable in the long term.
These comments come at a time when an IMF mission is expected in the country early next month to review economic trends and Malawi’s performance in line with the Extended Credit Facility (ECF) programme.
It is also a time when the economy is faced with a myriad of challenges, including a fast depreciating kwacha, high interest rates coupled with rising inflation rate which have eroded people’s disposable incomes making it difficult for most families to finance domestic needs.
The IMF team will determine whether or not the Fund will resume the US$150 million ECF programme which was declared off track in September 2015 following the government’s failure to meet some targets set by the IMF.
But a retired economic professor Ephraim Wadonda Chirwa says government is accountable to Malawians and as such should stop relying on advice from the IMF on how to run the economy when Malawi has multitudes of trained economists who are ready to offer advice to government.
Chirwa says government should instead make use of the vast economic knowledge present in the country by consulting trained economists as well as the Economics Association of Malawi who are better placed to complement government efforts to nurse the economy back to health.
“Ideas to run the economy are in Malawi and not outside,” he insisted.
And Chancellor College economics Professor Ben Kalua has described the government’s insistence to make economic decisions based on agreements with the IMF as an unsustainable way of running Malawi’s economic affairs.
Kalua says it is unfortunate that Malawi should continuously be monitored by the IMF to determine whether or not the economy is on track or not.
“We should be looking at long-term solutions which are in the best interests of Malawians,” he said.
Kalua proposes that government needs to restructure the budget, where a zero – based budgeting plan should be adopted. He said Malawi also needs to rethink subsidies which have for a long time been draining valuable resources that could have been used to develop the economy.
“Subsidies do not make sense. We are busy subsiding people who are rich. We need to become smart about a lot of things,” he said.
The IMF team, which is expected to be in the country till March 23, will also review key economic indicators such as inflation while also reviewing government’s cash books to determine whether there is correlation between the budget and expenses.