Chilumpha argues his case on Malawi economic revival: Counters JB’s critics
Malawi’s former vice president Dr. Cassim Chilumpha has said the austerity policies of President Joyce Banda are working, making a strong and plausible submission in parliament that despite critics comments against the 2013/14 national budget, the future looks to be “good and better.”
Chilumpha who has served in various ministerial portfolios including Finance, Energy and Education, praised President Banda for economic recovery programme launched last year that included the painful devaluation of the kwacha.
The Nkhotakota South MP hailed President Banda “for the firmness of mind and yielding determination” to put the country’s economic house in order.
He expressed gratitude to the people of Malawi “for the fortitude and resilience” they have displayed in the face of the economic hardships that became inevitable as President Banda commenced “house cleaning exercise.”
“After the Katrina or Tsunami, which hit the economy of this country in 2011 and the destruction it left in its work, the process of economic reconstruction could not be painless. There had to be unfortunately and very regrettably excruciating pain suffered. Unfortunately and this is the sad bit of it, the majority who have won the blunt this pain are very innocent people who had nothing to do with the misdeeds which led us to this sorry state,” pointed out Chilumpha.
Turning to the Budget Statement, Chilumpha noted that critics have described it as offering no hope and that it punishes the poor.
“In a thriving democracy like ours, that is to be expected and I would have been surprised if it was otherwise. But Mr. Speaker, Sir, contrary to those claims and assertions the fact of the matter is that the endurance and patience which Malawians have demonstrated over the last twelve months has not been in vain,” he said.
“The worst that we feared is certainly over. The dark clouds of economic gloom that had enveloped this country are now lifting. And rays of hope are beginning to appear on the economic horizon,” said Chilumpha.
He concurred with President Banda that “this is the year of fulfilment. “
Said Chilumpha: “You might ask where this optimism or hope coming from is. I say, Mr. Speaker, Sir, from the budget itself.”
He argued: “First, after what appeared to be unstoppable and reversible upward spiral inflation is now falling. It is projected that in the next six months, by the end of this year, it will be standing at 14 per cent from the current of 36 per cent and that by the end of next year we will be experiencing a single digit figure of 7 per cent.
“Secondly, GDP which had fallen to a miserable 1.4 per cent at the end of the 2011/2012 financial year, is expected to rise to 5 per cent this year and by the end of next year it will be at 6 per cent from 1.4 miserable per cent.
“Thirdly, Foreign exchange Mr. Speaker, Sir, which was not available in this country for over the last two years in adequate supply is available everywhere and banks are actually refusing to take more foreign exchange. Of course our detractors are quick to say that this is because we going through the tobacco selling season. But so why did we had last year? We had a tobacco selling season last but the country had no foreign exchange and could hardly service its foreign debts. “
Fourthly, Chilumpha said, the Kwacha is holding very well against international currencies.
“By Friday last week, 31st May 2013, it was trading at as low as K318 to the U$ dollar in commercial banks from K350 to the U$ dollar when this House started sitting. “
He also told the House that production capacity in the private sector has moved from 30 per cent where it was when President Banda assumed office to over 60 per cent at the moment.
“Tobacco production, Mr. Speaker, Sir, which had fallen to 79 million kilograms, has nearly doubled to almost 156 million kilograms this year. In U$ dollar terms the price per kilogramme is one of the highest in over a decade. Domestic revenues are projected at 363 billion which is K80 billion over the figure of K283 million for the current financial year,” he said.
Chilumpha said “when you put all these measures together, what you see is clearly a situation where economic recovery is definitely underway.”
He quashed critics who are claiming that the budget offers nothing to the poor.
“I say, if you look at the spending in all the social sectors, agriculture, education, school feeding, health, people with disabilities, social protection, women and children, youth and transport, all for the poor people. You will see that they constitute over 75 per cent of the budget,” he enlightened.
According to Chilumpha “when you look also at the budget envelope, you will definitely see that Malawi is actually doing very well.”
He added: “Let me add other measures which also show that the budget is also focusing on the poor. The one cow per family which is provided for in the budget is for the poor. It is not for the rich. Mudzi Transformation Trust is for the poor and not for the rich. Graders are going to be relocated to the district now to grade our roads in the rural where 90 per cent of our people who are poor live. Mr. Speaker, Sir, what more evidence do we need.”
Chilumpha said the policies of President Banda and the PP- led government are working.
“They show that in spite of the very small budget resource envelope that we have, and the enormity of our economic problems, the PP-led government and Her Excellency and her Cabinet and the whole Party remains focused on improving the conditions of the majority of our people who are under privileged,” said Chilumpha attracting applause.
But he said there was no need to be complacent.
“Recovery is beginning and we have to continue working hard because the recovery has got to be nurtured and consolidated as Malawi continues to be a net importer we need to broaden and deepen our foreign earning capacity,” he said.
“The Minister of Finance bemoaned the fact that we are unable to utilise all the resources that are made available by our donors. We need to rectify that problem.”
He also said the private sector is the engine for economic growth and government needs to continue its constructive engagement with the sector.
“The private sector is also full of advice to government to do its job better that is accepted. But as a nation we must also demand more from the sector.
“As the economy is recovering foreign exchange is available, fuel is available, inflation is coming down it is too much to ask that they should now consider bringing down prices some of the basic commodities?”
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