The politicisation of national initiatives


This column has repeatedly called for a conducive macroeconomic environment that would spur the entrepreneurial spirit in Malawi. On several occasions, this column has made a case for affordable capital for businesses. The opposition to high interest rates that stifle the business sector has been one of the hallmarks of this column.

It was, therefore, more sobering when last week an anonymous admirer of The Nutcracker raised the issue of politicisation of national initiatives for narrow political gain. The Nation on June 15 2017 article “Little hope for K1.6 billion Malawi Savings Bank (MSB) toxic loans recovery” is a clear testimony of the consequences of politicising national initiatives.

It is not lack of economic initiatives that has led to the current situation but the deliberate exploitation of political power by a few individuals at the expense of the rest of the citizens. It is perhaps important to remind each other of other past initiatives that were contaminated by the parasitic political bugs that seem to manifest themselves every time a good opportunity arrives.


On January 29 2005, the Malawi Rural Development Enterprise Fund (Mardef) was launched by a presidential decree after Parliament had approved its establishment. This was the brain child of the Democratic Progressive Party under Bingu wa Mutharika’s reign. This fund whose purpose was the provision of access to loan capital to the rural poor Malawians who wished to set up or expand small businesses was a good initiative. The fact that this was supposed to be a revolving fund meant that it should have been self-sustaining and expanding to allow more to benefit. No sane Malawian would oppose the fund since it targeted women, the youth and the disabled as the main potential clients.

The fund was designed to achieve wide outreach in all the four regions to ensure equitable distribution of resources across all constituencies in the country based on population. Although Mardef had intended to target the rural population, the actual operations covered both rural and urban populations. Time has passed; the fund has assumed a new name and legal status. It is now renamed the Malawi Enterprise Development Fund (Medf) and registered as a limited company since 2014.

Mardef was largely funded by taxpayers’ money. Unfortunately, the implementation of this noble initiative was highjacked by political zealots and opportunists. By 2015, the organisation was struggling to breakeven. Despite the efforts of the government and parliamentarians who increased the budget of the organisation from K300 million in 2013 to K1.2 billion in 2015, the organisation was sinking. The main cause of this was the politicisation of the organisation. It was being run as an extension of a political organisation.


Many reasons have contributed to this dismal performance and these largely include inefficient loan management and tracking system; poor internal controls; and loss of focus and direction resulting in Medf being managed as a political organisation. Just like many other presidential initiatives that have failed in Malawi, Mardef was introduced through political party manifestos resulting in perceptions that they are to be given to only those that belong to the political party. Access to the loan products was being perceived as “payback” to the party supporters.

In some cases, the launch of the products was done during political rallies which exacerbated the perception that the product was for the party introducing it. Politicians interfered with the operations of the institution through introduction of groups to access loans, discouraging repayment of loans as part of political campaign and threatening management in cases where they are pushing for repayments.

The elections of 2014 and the urgency of the People’s Party (PP) government to demonstrate impact and increase its chances of being elected did not help matters at all. On November 8 2013, Joyce Banda launched the Farm Input Loan Programme (Filp) targeting at least 750,000 people during that agricultural year as one way of ensuring food sufficiency at both individual and national levels. This was to be funded through Mardef. As a result, the total loan portfolio increased by 1,187 percent from 2012 while the loan loss provision increased by 2,160 percent over the same period. Indeed, by June 2015, the Mardef balance sheet losses increased to K8.3 billion from K235.1 million in 2012. This was due to poor loan repayments on all loan products, hence huge loan provisions, especially Filp loans. The defeat of PP at the polls created uncertainty on the future of Filp, hence fees and corresponding income was not recognised during the period. There was no recovery of interest on Filp loans as directed by the PP government and yet Mardef incurred expenses to recover the loans. In addition, most loan groups simply disbanded as they were politically mobilised, hence no group cohesion.

If Malawians must build a nation, then it will be important to stop the politicisation of national initiatives and focus on forging a more just society where no Malawian is held down because of political affiliation, district of origin when it comes to accessing loans from the national funds like Mardef and its successor Medf. It should be a nation where access to loans under these initiatives should be based on dint of objective assessment of the business plans and constructive enterprises not political affiliations.

Facebook Notice for EU! You need to login to view and post FB Comments!
Show More

Related Articles

Check Also

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker