Chinsinga on reality of zero-aid budget in Malawi

The new government of Malawi that was ushered into power following the 20 May  2014 elections started its tenure facing an ultimatum from donors: restore fiscal integrity or forget about the resumption of budgetary support that makes up as much as 40% of the total budget.

Donors suspended budgetary support to the tune of US$ 150 million following the revelation of massive looting of public funds to the tune of US$ 100 million by syndicates involving civil servants, politicians and businessmen.

Dr Chinsinga:   Knee-jerk experiments with bizarre, self-reliant budgetary frameworks

Dr Chinsinga: Knee-jerk experiments with bizarre, self-reliant budgetary frameworks

This unprecedented looting has been christened “cashgate“. It involved making massive dubious payments to suppliers that often did not provide any goods or services. The popular expectation was that the new government would quickly address donors’ concerns about cashgate in order to restore their confidence in the public financial management systems, but this has not happened.

The critical question is: why is the government of Peter Mutharika not moving with speed on cashgate even as it holds the key to the restoration of budgetary support? Instead, his government has opted for the “zero-aid budget” as a strategy to cope with the withdrawal of donor support.

The zero-aid budget is pegged at MK742 billion, with a deficit of about MK 107 billion. It is therefore projected that the national revenue authority will rake in about MK 535 billion. While the 2014/15 budget has desisted from raising taxes, it does not explain how the deficit will be financed, apart from saying that the government will continue engaging with donors, and should they decide to support it, a supplementary budget will be prepared accordingly.

This is not the first time that Malawi experiments with an innovative budgetary framework. In the 2011/12 fiscal year, late president Bingu wa Mutharika, brother to the current President, rolled out the so-called zero-deficit budget. Likewise, the zero-deficit budget was minted in response to donors’ withdrawal of budgetary support, prompted by a worrisome economic management and governance track record. The consequences were disastrous: Malawi was headed for almost complete political, economic and social meltdown.

The zero-aid budget has allocated decent sums to security institutions as well as the Anti-Corruption Bureau(ACB). The ACB has enjoyed a 167% increase in its vote, which might at least be indicative of the government’s commitment to get to the bottom of cashgate. This is, however, a huge paradox because the ACB’s Director has been redeployed to the Supreme Court and a replacement is yet to be made almost three months later, while it is well known that the successful prosecution of corruption cases is dependent on the ACB Director being in post.

This is not a good sign. We are very unlikely to see the government actively pursuing the cashgate scandal to its logical conclusion in order to get a clean bill of health to stimulate the resumption of budgetary support. There are strong perceptions that cashgate is the invention of the President’s party when it was in power under the leadership of his brother between 2005 and 2012.

Anecdotal evidence seems to support these perceptions. The late President Mutharika’s estate swelled from MK 150 million to MK 61 billion during this period. There is an audit query for that period that suggests that about MK 93 billion was not properly accounted for. More importantly, according to the Baker Tilly preliminary audit report about the cashgate scandalthe late President Mutharika’s government instituted reforms that created a favourable atmosphere for gross abuse of public financial resources.

These reforms, among others, included removing the ceiling on cheque amounts that government ministries and departments could present for encashment at commercial banks. A consortium of banks where government’s accounts are held were advised not to refer back any government cheque, even when there was no money: they simply had to be honoured.

Given this background, any unguarded prosecution of the cashgate scandal could potentially implicate some of the big shots in the current government. In this regard, the zero-aid budget is very much a strategic ploy to avoid donor accountability, rather than a commitment to graduate from excessive donor dependence after 50 years of independence, as it has been claimed in some circles.

In a much broader context, the experiences of the zero-deficit and zero-aid budgets raise a fundamental question about the underlying nature of the country’s political settlement. The critical issue in this regard relates to how individuals or parties get power and how they attempt to maintain once they get it.

In the absence of a viable private sector and regulatory framework for political finance, the state coffers become a primary target for those in power to play the political game that has invariably led to the entrenchment of corruption in the public sector and the primacy of patronage politics.

There is no doubt that Malawi needs to graduate from excessive donor dependence after 50 years of independence, but this cannot be achieved through knee-jerk experiments with bizarre, self-reliant budgetary frameworks minted to protect the political elite’s prerogative to dip into the public coffers as they please and largely for selfish ends.

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37 thoughts on “Chinsinga on reality of zero-aid budget in Malawi”

  1. Reu says:

    This prof is writing his article with conspicous prejudice the whole article is therefore compromised and his integrity is questionable

  2. WAMANDASI says:

    Nobody in his/her right mind would like to be begging forever. Budgetary support is the neo capitalistic slavery imperialistic method that keeps poor malawians to the umblical cord of white masters. It’s political as well as corrupt because it ant zdb are agents of manipulative dependency. In real sense once could advocate gradual zdb to materialise in 20 years time unlike scraping it out in its entirity. Let’s be frank the more we depend on whites we become vulnerable to whatever demands they make. Ask white people to provide roads, schools, hospitals, high speed internet like theirs. They will face the other side. It’s for them to pay millions to accumulate hiv stats, then manufactura arv, condoms, force govt to purchase on loan and provide them freely. Donors pay semimars with huge allowance. Never be cheated like there’s anything as free aid, donation. We pay back. Owing white people is the designed neo slavery and colonialism. The aim is bad. Gaddafi was depositing fuel benefits straight into citizens’ account but they killed him.

  3. Austin Matutu says:

    Professor well said. I may not all the information but can continue to the argument by saying 1) the delay in avoiding the conclusion fast is because a foundation had been made to loot more money. 2) The writing on wall clearly shows we may be heading for another meltdown of the country. 3) The emphasis to nail the former president on th so called Cashgate is derailing efforts to address Donor’s concerns.

  4. nick says:

    Excellent article!
    This article should be responded-to by the Minister of Information, point-by-point —- but that is not the way in Malawi.
    Serious criticism of the government is never answered by the government except by vague charges of anti-government bias.
    Is this because the critics (Tenthani, Chinsinga etc) are always better-educated than ministers?
    Or perhaps that the criticisms are correct ?

  5. jessy mtila banda says:

    are you the whole proffessor, trying to say that because there is cashgate then we should not have budget? donors have withheld their budgetery support then we shouldnt have a budget? because there 92b audit querry then there should be no budget? what sort of lecture are you? did you read what you have written? if so have you seen how nosence your article is? a chisinga you are useless, heartless, nonpatriotic baised commentator. malawians are watching you from a distance

    1. peter says:

      Hahaha! While some Malawians are watching Chinsinga from a distance most Malawians are following your government’s actions from within!!!

  6. Smart Namwali says:

    Goodall is the most notorious man he and his government are trying to suck milk from astarving cow.Malawians are the starving cows

  7. Fukulani says:

    A sober write up!

  8. Chingwe Chambuzi says:

    Well written article prof. The current DPP administration led by Peter Munthalika is scared of persuing ‘cashgate’ to its logical conclusion because DPP was the architect of the same. Their names appear on the list and we should not be suprised by their inaction.

  9. Munthu wa Mkulu says:

    Kodi agalu inu mukukana chiyani apa? Munaba ma voti kuopa kuti Dr. Chakwera akalumbira akunjatani. Pano budget yavutatu. Zipiyo za chabechabe. Kagulitsani mmashopumo.

  10. Joe says:

    zina zanenedwa mu article yi ndi zoona.but some points are being missed here because of bias and hatred.Donors gave conditions for resuming aid right before the current govt.The amayi govt did not delay in passing the budget bcoz they knew court cases,one of the conditions, could not be concluded within a day.Came Peter govt, they disolved the budget with the aim to addres the concerns raised by the donors.but they also discovered that the conditions could not be fulfiled within a day as well.If the only option you have is to act independently,do acordingly otherwise you suffer bcoz nobody wil provide for you.Mr Chisenga, why are not writing anything about Amayi knowing she had a zero aid budget as wel?If Bingu govt put conditions for looting why did Amayi not remove them before cashgate was made known to people.It is quite clear that your article is biased.There is no truth telling where there is hatred and bias.

  11. Chindikani says:

    SOmetimes we people like to get emotional over issues we hardly understand….The argument is straight forward…yes we need to unchain ourselves from excessive donor dependence….but not as a ploy of insulating our politicians from the requirements of being held accountable….there is an animal called fiscal sociology of revenue generation out there which a political economist of his stature is surely evoking…..as a fellow Malawian citizen I would expect the dot.com generation to analyse and discuss the issues, but alas, we are discussing the individual…questioning the academic accolades of a distinct graduate of the real University of Malawi, an alumnus of Cambridge University…a world class researcher….he has earned it all… he doesnt have anything to prove to anyone anymore….let us discuss the merits and demerits of the argument…the reach and limits of his logic…

  12. Pita Munthalika says:

    bwana chinsinga munena zoona. wakutsutsa ndi mfiti

  13. lufina says:

    This article by Professor Chinsinga is very objective, he is analyzing donor fund withdrawal and zero budgets. One was dubbed zero deficit and the other is being dubbed Zero Aid budget. Now what the good old professor is trying to drive home is the point that Malawians if not properly checked these devices of zero budgets could be used to plunder the fiscus by politicians. Mwamva anthu opanda mzeru mu ku tukwana apanu. you need critical thinking to understand this article not myopic face value political thinking

  14. ambelekwacheni says:

    DPP is part of Cashgate the full report by the Forensic auditors says Bingu govt
    produced conducive invironment for stealing. JB govt worked to expose it the dumb
    Malawian thr hook and crook brought back DPP WE are doomed we need another
    chiongolero to take us to freedom

  15. Gonto says:

    The problem ife anthu akumudzi- Malawi inakula ndi nsanje.We don’t appreciate somebody’s efforts and writings.We are just good at Critising. I have known Blessings Chinsinga more you people you just write everything negatively. For your Information, Chinsinga was first student at Chancellor College to get a Distinction after a 11 year drought. He did his Masters at University of Cambridge .He passed with Credit and finally his PHD in Germany.He has been involved in many researches . Please can you write your article the way how you wanted to be?

    Gonto wa ku Forokoloko

  16. CHEWA FEDERAL FRONT_(CFF) says:

    Looks like some cannot grasp what the professor is driving at in this paper.
    Someone is so silly as to say that Chinsinga was a “quota student”. Ok ok, that may well be; but then a logical question arises: if a “quota student” can excel in the manner Chinsinga has, what does that tell us? My Propositional Logic leads me to conclude that “Quota Students” are just as clever as “MERIT” ones.
    In fact, it’s not unusual to see spoon-fed “Merit Students” flee from Maths & Physics after Year 1. Even Elementary Calculus becomes Too Dizzying for them. Real Phwezi-Marymount Merit without DEPTH. That was my experience, at least.
    Now, Chinsinga here is clearly dissatisfied with the “underlying nature of the country’s political settlement”. Chinsinga would rather that we had a better “political settlement”. A BETTER POLITICAL SETTLEMENT!!!!
    Tell you what? Chinsinga, in this very article, has just endorsed a Federal Malawi. Go & ask him if you doubt it.

  17. manra says:

    the only problem with Chinsinga is that he wants government to run its affairs with theories instead of action! Remember that we normally go to school to acquire knowlege and that we should use it when it comes to action! never believe in theories but prove that when therios are put in practical are very helpfull.

  18. chekambewa says:

    Chinsinga you are more less as a stool you mean you are failing to make analysis of the events and failing to look for priorities you are useless yet you call yourself associte professor to hell with your professorship anawo ndiye ndimbuli what do you teach them? foresake

  19. wapa BUNDA says:

    abwana ndi amene a chinsinga

  20. mdzukuru says:

    Very true Bwana CHinsinga those accusing you they know deep down that this is true. pursue cashgate now we want to know who was behind the massive rooting during 2005-2012 when Ligoya wrote the Late President on the malpractice. Come current government and take responsibility of past errors of DPP on cash gate.

  21. Waakulu says:

    Chinsinga ! Why do you refuse to think ? You have rightly said that donors contribute 40% of our budget, cant we plan on our 60% and use d@ to deal with the looters ?? Mr Chinsinga, u were my Lecturer bt little did I know d@ u are/were such a dull homosapien.

  22. mmihavani says:

    Hahahahaaaaa I always wonder how this Blessings guy got his PhD. His thinking is so shallow and his analysis so basic. His thinking is driven by malice and hatred. So to him, what he could do was to pend the budget process, force the courts to convene and prosecute the cashgaters en masse within a month? Does he know what drives the judicial process? To him, he still believes like his amayi that the only way to survive is through the white man, and that as Africans we are so inferior we can’t do things on our own. In my BCom course I learned how to make decisions under conditions of risks and uncertainty and that’s exactly what government is doing. I have always said that we do not have political analysts here; these are just mere commentators. They can’t compare with the pundits we see in other countries. The guy is too theoretical he can’t think on his own. Ma PhD amenewa akungokutuwitsani ndiye bola kukhala wa form 4 koma kukhala ndi shop yako utha kuchita bwino kupotsa awa a ma PhD otuwa mbuu wa. I have never been impressed by this guy.

    1. mmihavani says:

      While you Blessings are waiting for the white man to come and feed you, some of us, equipped with little education, have worked hard in our businesses and we are employing more than 30 Malawians with decent salaries. We can’t wait on donor support. The problem is that with your PhDs the only skills you have are about Proposal Writing for donor funding for your ghost projects. So munazolowera kunyambita matako a ma donors for you to survive. Wake up man, hatred will take you nowhere.

      1. MKHOLA says:

        You must have a small brain. Do you want to show us how myopic your thinking is? Read in between the lines you dunderhead.

    2. Hehede! says:

      Your last sentence says it all. You are the one who misses the point here. I hope in your BCom class you learnt the basic statistics of trends ie if indeed you went through BCom program. Prof Chisinga is looking at the zero seriousness on part of govt to curb looting government funds on historical involvement of DPP gurus and effort invested in now in comparision to what the then DPP led by late Bingu. If you cant comprehend this simple and straight forward analysis then I really doubt if indeed you have a BCom.

    3. Kanonono says:

      Much as there are some weaknesses in what Chinsinga says, it is also foolhardy to think that he has penned nonsense. Of course you might have learned about risks and uncertainties in whatever course you did but Doctors do not conduct experiments on people’s lives. They do their experiments on animals and apply the learned experiences on people.

      1. mmihavani says:

        These are not doctors per se but artists. Real doctors are from College of Medicine who practice what they learned. These political scientists are just like Monday football commentators; nothing new to offer and no experience to show for. Akhale ma professor a political science bwanji osalowa politics ndi kukasintha zinthu, amangokuwa who who who who basi ngati galu wa njala.

  23. Nankungwi says:

    Chinsinga you are biased, you are short on information and you are misleading. You can’t have court hearings without funding and so the budget had to be agreed first, it’s not easy to just hold a hearing and pass judgementt overnight unless it’s a Kangroo court! so stop being blindly critical. The Tilley report will be out for everybody to read and by the way bear in mind that the Tilley report was about lenders trying to find out what happened to their money! it was not even about Malawi finding out what happened in its own country!. Why don’t you stop indulging on subjects you have no evidence on? If you have evidence that Bingu squandered 93 billion what not bring it to the public and let them their judgement.? Why do you not allow Peter to carry on his tenure as he legitimately won the election in May! and let him prove what sort of a leader he is?

    I am deisappointd in you Chinsinga! you are supposed to be one of the la’ creme de la’ creme but rubbish! totally non objective reasoning! Malawi has a long way to go!

  24. Aaron Mwala says:

    I have probably missed something here. Donors have withheld $150m dollars which is 40% of our budget. Is malawis total budget $375m?

  25. rasta says:

    great article. can you now brainwash those students to start demos

  26. KUKHALA says:

    YEAH -CHINSINGA YOU ARE TALKING VERY GOOD LOGICAL SENSE IN THIS ARTICLE. APM IS CONTINUING FROM WHERE HIS BROTHER STOPPED LOOTING . LOOTING IS POSSIBLE VIA OPERATIONS OF EITHER ZERO-AID BUDGET OR ZERO-DEFICIT BUDGET. MALAWIANS WAKEUP AND TAKE NOTE OF DPP THUGS LOOTING OF GOVT FUNDS PROMOTERS.

  27. mwana mulopwana says:

    A Chinsinga, cashgate cases will take so much time and for your information, for the cashgate cases to proceed , Parliament was supposed to meet and pass bugdget so as to fund the cases to proceed, you are a lecturer and you are sometimes required to use common sense, but now I am trying to wonder if the the whole senior lecturer with PHD is failing to understand this simple logic, so how do you lecture mere students with only MSCE , Mr Chinsinga learn to use your head fully

  28. milos says:

    Its very interesting that the JB administratiopn who were given the same ultimatums by donors towards the end of their tenure is not mentioned at all INTHIS ARTICLE!!?? NOT AT ALL!! They had the same chance to bring the looters to book but Chinsinga is only concerned with the DPP administrations- how accountable was the JB administartion Chinsinga? Are you really a scholar??? This is a very weak, flaccid and impotent article consistent of a forem four school leaver not a College lecturer!! did you really go to school Chinsinga?? are part of the quota students??? very shallow and un-enigmatic-perambulations around the periphery!!

  29. Chafera Mthengo says:

    Search my soul

  30. John says:

    Izo, ndimanena ine. Bwanji ma audit angotchulidwa a 13million? Kodi zija za Bingu ndi zikwama za ndalama zija pa maliro amalimbirana APM, ana a Bingu ndi Callista zili pati? Ndalama za Ndata farm zidayenda bwa, zinachoka kuti? Ndalama zija zidapezeka ku ma account a kunja a Bingu zili potani? Koma a Malawi ndiye MBEWA ZOFIKAPO. Kuyiwala yiwala zinthu koma ine sin’nawone. Uyu walemba apa, GOOD JOB PROF. Tiyeni nazonitu apa!

    1. kholophethe says:

      Only DPP people will oppose this great analysis. Thank you Professor Chinsinga.

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