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Goodall Gondwe, Peter Mutharika differ on economy

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Minister of Finance and Economic Planning Development Goodall Gondwe has warned Malawians to tighten seatbelts as the country is going through turbulent times.

He was speaking on Wednesday during a breakfast meeting organised by the Association of Early Childhood Development in Malawi (AECDM) to lobby for more funds towards early childhood development.

“I was a frustrated person when somebody stood up to complain that we had cut their funding towards ORT [Other Recurrent Transaction] and they won’t have a new car,” said Gondwe before adding:

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“Do you think that’s right to ask now? I have to decide whether we are going to release money to somebody to have a new car or continue with an old car so that somebody in Mulanje, Mzimba or Karonga should eat. We are in a situation as bad as that.”

However, in his national address to commemorate one year in office, President Peter Mutharika said the economy enjoys positive growth despite the challenges faced this year as a result of floods and dry spells that affected agricultural production.

“It is estimated that the economy grew by 5.5 percent and is expected to rebound to higher levels averaging seven percent or higher from next year,” he said.

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Mutharika said inflation has decelerated from 24.2 percent in November 2014 to 18.3 percent in April 2015 mainly explained by the relative strengthening of the Malawi Kwacha supported by declining pump prices of fuel.

“We expect annual inflation to fall to 16.5 percent in 2015 compared to 23.8 percent in 2014,” said Mutharika.

He also said the decline in inflation is expected to increase people’s disposable incomes and interest rates are also expected to decline in 2016.

“Foreign exchange rate has continued to stabilise,” said Mutharika “as a result of Government initiative to stock enough foreign exchange reserves which have been more than three months of import cover.”

He said this has enabled the private sector to plan and be able to import their raw materials for industrial production without much difficulty.

But in an interview after the meeting to explain why he advised the association to do more with less, Gondwe said:

“We have to agree that the sort of picture that they painted requires that we invest a lot more than probably we are doing on early childhood. But as I said it would be a two-way traffic, they have also to look at how they can achieve the results with less money because as you know the resource envelope is not as large as was the case before.”

Gondwe advised that Malawians in all their endeavours will have to see to it that they do more with less money.

“The days where we cried for funding are slowly going we have to be relying more on how efficient we are in the use of resources,” he said.

He said for example the association was demanding more money in order to train caregivers for early childhood education. He however said that, the association prioritized need for allowances in their request.

“Before you have money to actually impact on a child you have used quite a bit on allowances and various other things that really need not to be spent money on,” he said.

Gondwe said the mindset will have to change.

“Allowances are important yes, but we should probably emphasise on more services than self satisfaction,” he said.

Reacting to sentiments from Gondwe, Board Chairperson for Association of Early Childhood Development in Malawi Foster Kholowa said what Gondwe said was interesting.

“It’s a wise statement and I commend him for that thinking. All of us know the kind of economic hardship that Malawi is facing and everybody must appreciate that we do not have donor funding and all of that, so we have to make do with the little that we have,” he said.

He nevertheless said they felt that it was important to have the Minister with them over breakfast because over the years they have had a number of challenges on early childhood development in Malawi.

The current budget has allocated roughly K40 million which is less than what they had last year.

Kholowa said there is about K500m needed for early childhood development in their strategic plan although at the moment they do not know if they are able to reach the budget target.

“Apart from government resources other stakeholders like Unicef, Save the Children and a lot more organisations have contributed to this big budget. I think our major weakness is that we are not able to account for how much is coming from international and other local organisations into ECD,” he said.

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