IMF prescriptions hurting Malawi: Congoma says economy heading towards its deathbed

President Banda greets Chair of CONGOMA Voice Mhone at Labour Day celebrations

President Banda greets Chair of CONGOMA Voice Mhone at Labour Day celebrations

The Council for Non-Governmental Organisations in Malawi (Congoma) on Wednesday said  International Monetary Fund (IMF) prescriptions  imposed on Malawi such as  a combined dose of 49 percent currency devaluation; floatation of the kwacha and removal of subsidies of fuels is hurting Malawians.

Congoma board chairperson Voice Mhone accused President Joyce Banda for implementing in full a set of the IMF harmful conditions.

Mhone was speaking in his solidarity statement at the commemoration of the May 1 Labour Day Celebration in Malawi’s commercial city of Blantyre, which President Banda attended.

He said workers in Malawi are toiling in vain because their income does not match the cost of living.

“Simply put, your Excellency [Pres Banda], looking into the bible what a casual laborer is going through today is very similar to what happened in Egypt where Israelites had their workload doubled, but for the same pay. Your people are really toiling in vain,” said Mhone   as the President took down notes.

Congoma boss said following the economic shocks Malawians have been subjected to, President Banda’s government should take the blame for its decision to adopt a full set of IMF prescriptions without assessing their implications for a common Malawian and the economy.

“Much that we needed to embark on these reforms It was not necessary for your government to implement them in a combined dose of a 50 percent currency devaluation; floatation of the Kwacha and removal of subsidies on fuels; the shock created by that move is too much for an average Malawian to absorb, especially where your Government failed to put in place social protection policy ahead of the reforms,” said Mhone.

“Up to now there is no meaningful safety net mechanism in place to cushion them. No wonder this continues to be followed by demands for higher wages and public suffering and dissatisfaction.

“We are equally perplexed with the statics we get benefit from Reserve Bank. Our import bill is at $200m and export bill is at $30m and for the two to come to balance it will take ages,” he said.

Mhone pointed out that the time President Banda took over Government in April last year, the import cover was 1.8 months but a year there after it has gone further down to 1.2 months.

“Therefore the reforms your Government has embarked on are unattainable to poor countries like Malawi, unfortunately, it is the already squeezed workforce at grass root level who are taking the brunt,” said Mhone.

“[Pres. Banda] you may agree with us that too much quinine can kill and, honestly speaking, our economy has been overdosed such that it is heading towards deathbed if we still remain careless,” said Mhone.

He urged the President to seriously engage the IMF and provide mechanisms to cushion the poor or else Malawi should turn the tide on development partnership to the East such as China “where pain-inflicting conditionalities do not exist”.

Reacting to Mhone’s remarks, the President said there is nothing else her government could have done on IMF prescriptions but said the economy is slowly healing.

Banda said economy has started stabilizing and inflation, which had hit 37 percent, “has started declining.”

She vowed that her Government will “remain focused on the course we have taken until our economy has fully stabilised.”

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