Economists say Malawi still needs donors:  Govt in ‘financial fix’

Malawi’s tax base cannot meet recurrent expenditures and other projects expenditures and government is being advised by economists to crackdown on corruption, ensure transparency and accountability to win back confidence of donors, who are withholding 40% of budgetary support.

Government has been pushing the political narrative that the country can survive without donors supporting the recurrent budget but the economists argue the outlook looks pretty gloomy.

“Malawi is in a state whereby economic management is not yet at a level where we can say it can stand on its own without donor support,” economist Henry Kachaje said on Tuesday as quoted in the press.

Kachaje is president of Economist Association of Malawi.

He observed that corruption in Malawi government is “rampant” and that there is “general mismanagement of funds where resources are not yet prudently and fully utilised.”

Kachaje observed that Malawi’s capital investment “is not yet there” and that there is need for a long term plan to move away from donor dependency.

He is backed by University of Malawi economics professor at Chancellor College, Ben Kalua WHO says Malawi still needs development partners to support the development budget.

Kalua urges government to “work on winning donor confidence.”

The Nation newspaper reported on Tuesday March 28, 2017 that ‘Malawi government is in financial fix’ saying revelations about public hospitals depleting 87 percent of their drug budgets with four months to end of the financial year have shown that the country cannot do without donors.

And the paper said in an editorial comment that it is “time to put house in order.”

The paper said there are some countries with stronger economies than Malawi which are still getting direct budget support.

“This simply means that our development partners still have no confidence in the country,” reads the editorial comment, adding “what all this boil down to is that we must put our house in order.”

The paper urges government to continue to improve in the area of public finance management, saying that is exactly the message the Bretton Woods institutions have been telling Malawi all along.

Donors have been withholding direct budgetary support to Malawi since October 2013 after concerns over revelations of Cashgate, the plunder of public resources at Capital  by senior civil servants and politicians.

Economists urge restoration of fiscal discipline, fight against corruption as a key issues.