In its statement announcing the granting of a $175 million Extended Credit Facility (ECF)
programme to Malawi, the International Monetary Fund (IMF) was candid in its assessment of our economic development.
Here is a bit of what the Bretton Woods institution said: “Malawi continues to face a challenging macroeconomic environment. Years of unsustainable domestic and external borrowing and the adverse impact of multiple external shocks have resulted in the widening of macroeconomic imbalances, including protracted balance of payment needs…
“Malawi has struggled to sustain growth for decades despite large inflows of official development assistance. The past three years have been particularly difficult with stagnating growth and widening macroeconomic imbalances due to unsustainable debt and the effects of multiple shocks, including an outbreak of cholera and Cyclone Freddy this year alone. Malawi’s external debt is unsustainable and debt service needs are eroding limited fiscal space. Despite sizeable external emergency financing, the large fiscal budget deficit necessitated domestic financing.”
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It sometimes becomes very difficult to understand how a country that has never experienced any serious conflict since its creation can be among the poorest in the world.
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This is a country with great potential. For instance, the natural resources that we have could significantly turn around our economy if we properly utilised them.
The challenge has always been the leadership, because there really is no plausible explanation for this grinding poverty.
Like the IMF has stated, all manner of assistance has flowed into this country but the money has ended up being plundered.
In 2023, we should be ashamed that we still rely on the goodwill of donors to run our own affairs. It is even worrisome that our leaders believe we are entitled to receiving such assistance.
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At the granting of the ECF, Finance Minister Simplex Chithyola Banda was all over expressing his excitement and declaring we will be overwhelmed with the amount of donations various benefactors will be sending our way.
Well, we really needed the IMF programme because of its impact in terms of opening more aid taps that will most likely partly address the forex crisis we are facing.
We reached a point where any amount of support from donors would go a long way in ensuring some strategic commodities were imported into the country.
But Chithyola Banda’ s exhilaration should end at the realisation that no amount of aid can develop a nation whose own leadership is not determined to prudently use what is domestically available.
He should rather inform the country about a strategy that will create wealth and push Malawi forward.
In fact, the current forex and economic squeeze should have acted as an important skateboard for candid discussions on what we need to do as a country to develop.
We are an independent nation and we must for once think deeply about how to survive without the support of donors.
The donors do not owe us anything. It is just out of their benevolence that that they keep on pumping their resources into the country.
What will happen if they stop caring much? Because this is a possibility. For years, we have been talking about self-reliance by diversifying sources of income, but it has remained a song and years continue passing by.
It is dangerous to be a country that does not have a sustainable sector for economic development. The so much talked about agriculture sector is in trouble due to unpredictable weather patterns.
We cannot forever be crying out to donors to feed us. A time of fatigue will arrive and preparing for such a moment must begin now.
We all saw what happened during the Covid-19 pandemic, when countries that manufacture vaccines for the disease had to prioritise their people before making the inoculations available to poor nations.
When you run your own economy and are in control of your country’s progress, you have no time of accusing others of being selfish when they refuse to support you.
Chithyola Banda’s main task from now onwards should be putting in place sustainable measures of growing the economy, not marveling at the external support that is flowing in following the granting of the ECF by the IMF.
By the way, one way of saving the scarce resources that we have is by cutting unnecessary expenditures.
Malawians are monitoring with keep interest how the austerity measures that President Lazarus Chakwera announced this week will be implemented.
