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.

Kachaje: Malawi is yet to stand on its own economically

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.

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10 thoughts on “Economists say Malawi still needs donors:  Govt in ‘financial fix’”

  1. Chalume says:

    ECAMA and Mr. Kachaje, we need to be told something new. Everything you are spending time discussing is stuff we already are aware of. What solutions does ECAMA propose for Malawi beyond singing the same song of asking government to deal with corruption, etc? ECAMA is in a special position to influence policy in Malawi and should be able to propose avenues for change for Malawi and the government to adopt. ECAMA should be discussing the latest knowledge and economic research on Malawi that should be adopted by planners….. You come to us again with the rubbish we have been discussing since Bakili Muluzi got into power as if it offers us a new direction. Get your act together.

  2. Mika Kumbire says:

    The Malawi economists are prescribing wrong medicine for a wrong disease or ailment. How can the resumption of aid cure rampant corruption and mismanagement? Actually I strongly feel that Malawi can easily wane herself from donor support from funds realized and saved from proper financial management, transparency, accountability and prudent internal controls. This therefore means that prudent financial management and tight internal controls should be introduced not win back donor support but the country to achieve self sustainance. No country has ever developed through donor aid except Germany through the Marshal Plan which was largely a big grant. Most of the aid that Malawi receives is hopelessly unhelpful. i.e. Medical drugs, Human rights, and food aid. We could develop if we were given aid for infrastructural development and industrialization.

  3. mtete says:

    I think the main problem is that the ruling party i s very much addicted to looting, and sometimes in broad daylight. This is why our development partners have looked the other way and nothing short of a complete change of leadership will convince them to change their mind. Imagine; our president is shielding Chaponda despite recommendations by Commissions of Enquiry, our president wants to run the ACB and NAO, he just looks on as the so called Cadets terrorise established government offices etc,etc. We seem not to be making progress on Cashgate, maizegate, Embassygate and several other ….gate cases Now, which development partners would have faith in us? Not as long as DPP is in power.

  4. Joku joku says:

    Surely some of these Economists are the ones who encourages corruption and dependency syndrome Malawi cause of this adamant thick in the head thinking.Why should Malawi NOT stand alone and when do you think the country can be emancipated from donors ? It seems you benefit a lot thru the corruption and you know if the donor’s pull away, you will always be held accountable with the Malawian sweated money. Shame on Malawi economics and their economists

    1. Mhesha K says:

      … yes indeed, shame to the so called economists!
      By the way, donors said it all and earlier than this. They openly said that they also have financial problems back home; and their priorities and ideologies do differ and with time and country. Have you not heard Trump saying “America First” repeatedly? Malawi did not actually said no to donor support. It is the donors themselves who said it, and indeed stopped it. So do you think we should keep on crying for them even if they do not want? For how long? Negotiations for donor support have been there but ALSA! By the way, do you force somebody to help you? The best approach should be change the mindset. Focus on local, and the so called little resources and mange them properly and frugally. Not moving out with a begging bowl. Until when? Since independence this country has been getting budgetary support, but has poverty at any time in memorial been eradicated due to donor aid?

  5. The Analyst says:

    O………………………………………………………………………………………………………………………………………………………………………………………………………………………………….O
    The observation that there is regrettable mismanagement of funds, wholesale-corruption, and free-for-all theft is very correct.
    . . . But is there anybody who believes that the solution (or one of the solutions) to all these problems/observations is winning back donor confidence, hence aid? Come on, guys!
    . . . Kodi who doesn’t know that if MRA were to be remitting a fair proportion (at least 95%) of tax collections, Malawi would manage to get along very well?
    . . . Who is too new in town to know that notwithstanding MRA’s dishonesty (in declaring collections), a bigger proportion of the little (which MRA declares to govt) is also stolen by the politician?
    . . . Now, which sane donor would resume aid (to Malawi) when they (donors) know that Malawi is a land infested with shameless and arrogant thieves (from bottom to the top or vice versa)?
    . . . Kodi nkhani ya Chaponda ili pati pano, for instance? Siinatha basi? All because he’s close to the president?
    . . . Nanga, are we serious as a country when the U.S has to register dissatisfaction over lack of punishment to those 60 Ministry of Health rejects who stole HIV project funds?
    . . . How different are we from wild animals when the whole president celebrates lack of independence of the ACB? And arrogantly says I don’t take deadlines, when told to pass the ATI or risk losing aid?
    ……………………………
    Simply put, while getting donor support is not a bad thing; Malawi is only surviving (as opposed to living and developing), because we are thieves, not because of lack of donor support.
    . . . So stuck we are in theft, that it’s become a norm now.
    . . . So useless is the justice system that the wicked and the rich are often beyond the reach of justice.
    Malawi has enough money to finance the budget. We just need an honest MRA, a strong justice system and sober leadership, basi. Osati donor support iai.
    O……………………………………………………………………………………………………………………………………………………………………………………………………………………………………….O

    1. Mhesha K says:

      NO NO NO…
      A big proportion in government is not only stolen by politicians but also the generic civil servants themselves. Think about the JB cashgate where a chunk of civil servants was involved.

  6. Goodwell says:

    bvuto mbava zachuluka sakuchita dzinthu zokomela mtundu wa amalaw onse koma kutukula mabanja awo okha.ma department ambiri mwadzadza anthu okuba.koma Mulungu dzonse akuona azaweluza tsiku lina.

  7. masa masina says:

    The problem is not donor aid. The problem is that we Malawians do not have an ethos that would put donor aid to good use. We are a low trust society, tribalistic in our approach, so, we are better off without donor aid.

  8. benjones says:

    Malawi land of beggars.

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