Malawi development strategies after 50 years: What next?

Malawi Government has already put in a lot of thinking on the objectives and functions of the Malawi Development Bank. Nonetheless, it is my sincere hope that such a Development Bank in Malawi will not be like “traditional development banks” in the developed world. It is also my sincere hope that such a Bank will develop appropriate lending instruments to provide financing to the rural communities, along the lines of the “Grameen Bank in Bangladesh”.

Dr Cornelius Mwalwanda

Dr Cornelius Mwalwanda

The guiding principles of the Grameen Bank, founded by  Muhammad Yunus, is to create economic and social development from below by making finance available to the rural poor. The Bank’s view is that lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty, and micro-credit is one such means. The Bank provides credit to the poorest of the poor in rural Bangladesh without any collateral. At Grameen Bank, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the overall socio-economic development. There are now more than two-dozen organisations within the Grameen family of enterprises. These include the replication and research activities of Grameen Trust, handloom enterprises of Grameen Uddog and fisheries pond management by Grameen Motsho or the Fisheries Foundation.

Malawi will need to venture in this area if we are to make progress. Institutions like the Comsip and Saccu could form important foundations for concerted efforts to address the issue of access to credit by rural areas.

(d)          Role of the private sector in generating growth and employment

The private sector can be an important engine of growth and has provided the much-needed stimulus in developing countries. The World Bank  observes that a number of emerging trends on the African continent could help to transform Africa’s current state of development over the coming years. These include the promise of large revenues from mineral exploitation, rising incomes created by a dramatic expansion of agricultural productivity, the large-scale migration of people from the countryside into Africa’s towns and cities, and a demographic dividend potentially created by Africa’s fast-growing population of young people. The Bank is of the view that:“If properly harnessed to unleash their full potential, these trends hold the promise of more growth, much less poverty, and accelerating shared prosperity for African countries in the foreseeable future.”

Recent discoveries of oil, natural gas, copper, and other strategic minerals, and the expansion of several mines or the building of new ones in Mozambique, Niger, Sierra Leone, and Zambia, together with better political and economic governance, have been sustaining solid economic growth across the continent. Exports are also driving the continent’s growth and the traditional destination of these goods over the last decade is changing as well. Since 2000, the overall growth of Sub-Saharan exports to emerging markets, including those of China, Brazil and India, and to countries in the region has surpassed that to developed markets. Total exports to Brazil, India and China were larger than to the EU market in 2011. Consumer spending, which accounts for more than 60 percent of Africa’s GDP,  has remained strong and contributed to growth of the economies of the continent.

Increased investment flows are also supporting the region’s growth performance. In 2012, for example, net private capital flows to the region increased by 3.3 percent to a record $54.5 billion; and foreign direct investment inflows to the region increased by 5.5 percent in 2012 to $37.7 billion. However, notwithstanding these gains poverty remains pervasive in many parts of Africa , including Malawi. After more than a decade of strong economic growth, Africa has been able to cut poverty on the continent, but not by enough.

Recent major economic trends have changed how developing countries can use trade to facilitate their development. These trends are the economic rise of developing economies, the growing integration of global production through supply chains, the higher prices for agricultural goods and natural resources, and the increasing interdependence of the world economy.

Malawi will need to galvanize the private sector not only to contribute to growth and employment, but also for the country to gain from the world economy and global trade. Efforts will need to be intensified to find innovative ways for supporting the private sector, including programmes to support Micro-Small and Medium Scale Enterprises (MSMEs). The East African Community countries have made much progress in this area, including the Jua Kali Scheme, which supports the development of small enterprises in the East African Community.

In our neighbouring countries, such as Zambia, Mozambique and Tanzania, initiatives to promote entrepreneurial development have dynamited the private sector in those countries. In Zambia, the Bongo hive has proved an important institution for the development new entrepreneurial skills. On the website of Bongo hive, it is stated that the essence of this new lab can be described by three keywords:

Innovation

Innovation generally refers to the creation or improvement of products, technologies, or ideas that signifies a substantial change or difference. The pioneers working in BongoHive want to bring innovation to the world of economics, business, entrepreneurship, health, education etc.

Creativity

Refers to out-of-the box thinkers that know new ideas need nurturing and support. They also know that having an idea is good but acting on it is more important. In their thinking, results are what count.

Sustainability

Refers to the belief that some applications and services can leapfrog development in Zambia. To them applications and services need to have the capacity to endure. With a connected and conducive place for techies to work on technologies that can leapfrog development in Zambia, they hope to produce sustainable outcomes-

These “Entrepreneurial incubators” have proved essential for developing a core group of new successful business people in these countries. Malawi will need to move in a similar direction. There is need for our country to leapfrog technology advances.

Creating an “Enabling Investment Climate” will need to continue to be a key policy focus of the Malawi Government. Efforts will need to continue on improving the country’s ranking on the index of “Doing Business”. The recent establishment of the “One-Stop Investment Window” in the country is a step in the right direction.

(e)          The importance of visionary leadership in development process

The vision and calibre of top leadership is essential to drive the development process of a country. This principle is supported by developments in the “Tiger Countries” and more recently by the rise of countries like China and Brazil. The vision and mission of the top leadership of the country is important not only in setting out the priorities of a country’s development process, but  more important in galvanising all elements of society to “buy-into the process” and thereby become important stakeholders of that process, be it government, private sector or civil society.

Examples of successful developmental oriented leadership can be found in the fourth Prime Minister of Malaysia, Mahathir bin Mohamad, who was the  Prime Minister of Malaysia for 22 years from 1981 to 2003, making him Malaysia’s longest-serving Prime Minister. His political career spanned almost 40 years. During Mahathir’s tenure as Prime Minister, Malaysia experienced a period of rapid modernisation and economic growth, and his government initiated a series of bold infrastructure projects. Mahathir was a dominant political figure, winning five consecutive general elections and fending off a series of rivals for the leadership of UMNO. Rising living standards, together with Dr. Mahathir’s showpiece buildings and outspoken defence of Malaysia’s interests, contributed to a sense of national identity, pride and confidence that had not existed before. He put Malaysia on the map, and most Malaysians were pleased about it. For his efforts to promote the economic development of the country, Mahathir has been granted the Soubriquet (Father of modernisation). Mahathir’s official residence, Sri Perdana, where he resided from August 23 1983 to October 18 1999, was turned into a museum (Galeria Sri Perdana) .

Lee Kuan Yew was the first Prime Minister of Singapore. He is one of the founding fathers of modern Singapore. The youngest to be elected in the office, at the age of 35. He is the longest-serving Prime Minister of Singapore. He presided over the expansion of Singapore’s economy from a third world country into a first world country. He introduced the National Service (NS) scheme, with the help of his Defence Minister Goh Keng Swee. He introduced the ‘Stop-At-Two’ policy in 1960s, for fearing of over expansion of Singapore population. He led the PAP into 8 consecutive election victories.

The second Prime Minister of Singapore was Goh Chok. He introduced several major policies and policy institutions, such as Medisave, non-constituency members of parliament, Government Parliamentary Committees, Group representation constituency, Nominated members of parliament, Vehicle Quota Scheme. He presided over the period when Singapore experienced several crises, such as the 1997 Asian financial crisis, threats of terrorism including the 2011 Singapore embassies attack plot by Jemaah Islamiyah, the 2001–2003 economic recession, and the 2003 SARS outbreak. He also introduced the ‘Baby Bonus’ scheme in a bid to increase birth rates. Prior his appointment as PM, he served as Senior Minister of State for Finance, Minister for Trade and Industry, Minister for Health, Minister for Defence and first Deputy Prime Minister.

These examples of visionary leadership shows the importance of top leadership in driving a country’s development process. In recent years, country’s like China and Brazil have abandoned old ways of doing things and adopted innovative methods of driving the development process, and not withstanding the type of political system that exists in those countries. The leadership of these countries has provided the impetus for economic “take-off” of these countries. Does Malawi have that leadership. That is a “million dollar question”.

Malawi has so far had five Presidents, from Dr. Hastings Kamuzu Banda to our current President Prof. Arthur Peter Mutharika. These Presidents have each had a different opinion on perception of “driving the development process”, as one of the key functions Banda gave considerable attention to was development issues, especially agriculture. Professor Bingu wa Mutharika, was a visionary leader who knew that leadership was important in driving the development process, and indeed a number of important projects were initiated during his tenure. It is difficult to evaluate the Presidency of Dr. Joyce Banda, because of the short period that the Administration was in power. However, the efforts made to stabilise the economy, through the Economic Recovery Plan (ERP), have been appreciated by many. The current leadership of Prof. Arthur Peter Mutharika, being a new Administration has still to demonstrate that it will provide this much-needed leadership our country needs to take-off.

This country also needs institutional changes to support the development process. The most important of this is the “National Economic Council (NEC)”. Most of the Tiger Countries have this key institution, which becomes the “think-tank” on development issues. Countries like Malaysia, Singapore, Thailand, South Korea and Indonesia have National Economic Councils. Furthermore, even developed countries like the United Stets of America have a NEC.

Malawi needs a NEC to coordinate our development policies and serve as a think-tank on these issues and more important serve as a bridge between the public sector and the private sector as well as civil society. This is the institution that could drive “change” in this country.

Recent developments in the Malawi economy, with the country’s ranking on prosperity index in Africa dropping to 12th, and inflation beginning to edge upwards, give rise for concern. Malawians need to put aside their political differences and come together to generate change needed to drive this country towards prosperity. This country is not poor in terms of resources, but poor in terms of human capital needed to drive development.

  •  Cornelius Mwalwanda, PhD, is a former deputy minister of finance and MP for Karonga Central constituency.
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38 thoughts on “Malawi development strategies after 50 years: What next?”

  1. Twebakiki Chichi? says:

    Malawi needs action oriented people.Barking about these Asian tigers without taking any action is useless.These countries heavily controlled corruption and embraced the spirit of working around the clock.An average Malawian thinks of stealing from the top most bwana to bottom sweeper and you think you can compete with Asian tigers?For the people in power it takes ages to declare their assets.Reasons chachuluka ndi umbava.Dr Mwalwanda twende tulepule waka susa ni ndoki during weekends.You idea of mikwabo is good.There is alot of Usipa and masanga in Lupembe and Mlare.I have two canoes and we should be partners.Hope we can start from there.

  2. mpimpa says:

    ashiiiii aaaaa its too long my friend aaaa as if ndilemba mayeso by the end of the day? Aaaa

  3. johnM says:

    Mr. Mwalwanda has done well to respond to his critics. There are many articles written by people who think they know all the solutions and when one criticises them, they do not respond. Mr. Mwalwanda should therefore be commended.

    In his article, He starts off with the formation of Malawi Development Bank. I don’t know if he believes that it is the panacea of the country’s problems because it is not. Mr. Mwalwanda should know that these methods have already been tried and failed.

    Government already had INDEBANK which in the old days was Industrial Development Bank and INDEFUND. Government also founded Malawi Rural Finance Company and it had Malawi Savings Bank at its disposal. As I write, Government intends to sell INDEBANK and Malawi Savings Bank as they are thought to be bankrupt and Malawi Rural Finance Company has already been closed down.

    Mr. Mwalwanda should know that this Malawi Development Bank will fail because Malawians are not capable of running such an institution. It is disheartening to note that they have recruited Mr. Friday Jumbe to be its head. Mr. Jumbe is corrupt and to make matters worse incompetent. If you give him a bank which will give out loans without collateral with Jumbe at the helm, that institution is bound to fail.

  4. angoni says:

    You cant handle msb ndiye izi zotheka? Malawi

  5. nganga bulawayo says:

    The article is too long. Can’t Mwalwanda make it shorter, to the point and focused? And inu a nyasatimes osamalola zimenezi. There is a place for such long and winded essays but not online news.

  6. Mtavuma says:

    shupiti..za ma essay pano iyi…this idiot was deputy finance misnsiter and could have been implementing these ideas right there..usatikwane wamva?

  7. Geneva says:

    Frank wantani mwalwanda

  8. chembwiye says:

    Dazi lometalo nzeru zabwera lero, m’mbuyo muja zinalikuti nzeruzo?

  9. paulos banda says:

    CEO wake Jumbe aaa kaya

  10. makito says:

    On the contrary, this guy has just copied things with no analysis. The if Singapore did it Malawi can did it syndrome. Very shallow analysis not befitting such a personality.

  11. social analyst says:

    what did he do when he was minister and deputy minister for years? he cant even articulate malawi’s policies for the last 40 years because they are not written anywhere. All he knows is to read about singapore, malaysia, china etc.

  12. Mvula J. Mvula says:

    Mwalwanda is not out of power. To contribute to national development agenda does not necessarily mean you should be a Member of Parliament. It only shows we did not utilize his brains well when he was in the august house. I would encourage him to continue contributing such theories which are food for thought.

  13. Please allow me to thank those who have made constructive comments on this Article, whose intention was to stimulate debate on this important topic. Many of you have said why did I not write these issues when I was Deputy Minister of Finance during the period of President Bingu wa Mutharika and President Joyce Banda.

    For some of you who know the functioning of Government, the role of a Deputy Minister and his contribution to Government policy is limited. During the short terms I served as Deputy Minister of Finance and Development Planning, I believe I made my contribution whenever permitted, as was the case with the Malawi Economic Recovery Plan, Draft Master Plan for Tourism Industry in Malawi and Draft Master Plan for Fisheries Industry,

    It is my hope that this Article will stimulate lively debate on these important issues. May I also thank those who can only find time to publish insults, which is a clear indication of level of civility in some of our nationals. For those advising me to go into business, please be informed that am at an advanced stage to establish a commercial fishing enterprise.

    Am one individual who has taken seriously the words of the late President of the United States of America, JFK Kennedy, who stated: Do NOT ASK WHAT YOUR COUNTRY CAN DO FOR YOU, BUT ASK WHAT YOU CAN DO FOR YOUR COUNTRY.

    God Bless Our Beloved Country. C.T.M

  14. ujeni says:

    Please wake me up when Malawi start developing like Zambia, Mozambique and Tanzania

  15. WOYERA KAMANGA says:

    MADALAWA NDI AKU UNIMA AWA KUGERESA RUNNING STATE OF AFFAIRS IS NOT AS EASY AS KULOWEZA MA THEORIES BE PRACTICAL THAN BEING PROFESSOR IS VERY DIFFICULT TAKE FOR EXAMPLE PITATA HE IS A FULL PROFESSOR BUT HE IS FAILING TO RUN THE COUNTRY ALL HE KNOWS IS TO GO TO PRISON CELLS PAINTING SAY PROFESSOR PITALA ARTHUR MUTHARIKA DUNDERHEAD WAS HERE…..ON TREASON CASES AND IMMUNE TO POOR STUPID JUDICIAL SYSTEM OF MALAWI…..

  16. kyula says:

    I dont know how I can finish reading the whole article, but for what i’ve read, i make observations as follows:
    a. there is too much politicking in Malawi as we’ve already seen that DPP are already gearing for 2019.
    b. most technically trained people end with MBA’s and end up taking general mgt positions thereby stiffling their innovative orientation.
    c. most intelligent/innovative young men use their brains in white collar theft/fraud and corruption for self enrichment. Young men with senior pisitions are dobadobas in informal businesses using their strategic senior positions.

  17. master says:

    This guy is talking sense, very brilliant in this article, i think this guy has indeed the experience from General Manager, reserve Bank, UNECA Geneva,, but why is he saying these facts now that he is out of power??????????? i cry for you mwalwanda u have talked big sense here, but many cant belive u now that u are out power!!!!!!!!!!!!!!!!

  18. Juma says:

    A hyena is a hyena. Where were u all these years when gallivanting around world as a ” economist”. Useless people! The Asian tigers have hardworking people who by culture and nature are creative, entrepreneurial and innovation whose life’s purpose is the creation of wealth. Meal Wanda people like you are the complete opposite! Constantly looking for employment like your friends Goodall and Mkwezalamba! Can’t start your own business be coz of lack of creativity and innovation. Your whole lives have been based on living on dubious allowances and now u want to come here yavi yavi when u r jobless copying and pasting World Bank texts and faking like u have solutions to Third World poverty. My foot! Demonstrate your true worth by opening a business in Karina using your pension you maternal fornication with cognitive evolutionary hangover from subhuman primates! May u rot in hell!

  19. Greetings from Frank Tumpale Mwenifumbo

  20. MMALAWI says:

    Some pertinent issues indeed! But the question is how do we go about choosing the right leadership and reforming our institutions to conform with, and drive a progressive and ambitious development agenda? Surely that can not be achieved with our poor current leadership and way of choosing them. Furthermore, how do you grade the leadership of Mr Muluzi? You have attempted to evaluate the other four!

  21. This country is poor because of poor mindset.we got enough resources like mines and oil but we dont know how to run these things instead obwera are now owners we are just getting ndalama yachiphaso for our own things.

  22. walewaley says:

    Bwana, did you want to come out of the ministerial office to start telling us this tale?? its a good one but you are a fox in sheep wool

  23. Dr Mwalwanda has “hit the nail on the head!” It is time to follow through and implement development strategies of the cuntry.We need NEC (National Economic Council) along side Non-partisan Development Council.

  24. Mwawi Gondwe says:

    Dr. Mwalwanda yes indeed we lack the necessary human capital to propel the country towards meaningful development but if say you use the tiger countries example,you should also be able to narrate the social culture circumstances that prevailed in those countries which were the real midwives of change. Also remember the role played by the South East Asian Bank versus the role played by the World Bank and IMF in our scenario.In short we do operate in different social cultural context with the so called tiger countries.

  25. Rudolf Phiri says:

    Cornelius Mwalwanda, have these ideas come to you now that you are in the political wilderness? The reason that people trust those of you with experience in big institutions like you with your experience as General Manager in the reserve bank of malawi and all the experience at the African union, is to give you a chance to apply that knowledge and experience to make the country prosper. But what did you do? You wasted opportunities as an MP and Minister to perpetuate fights with your political rivals and wasted people`s money and resources in the process. You and many of these educated idiots that we have trusted with responsibility to run our country ( including all these thieving lawyers and little thieves like Mphwiyo) are proof that education alone is not the only qualification for political leadership. Even more important is the desire to serve others, love for country and the passion to put the nation before self. You had the education but none of the rest. So my view is, shut up about all these clever suggestions and history of the tiger economies. Being minister was the best platform to change things or at least being held, not nyasanet, and when you were given the chance by both Bingu then Joyce Banda, you were found wanting. Go find some university somewhere and teach them the history you are giving us here.

  26. Gerald says:

    An article worthy reading

  27. yosefe Bola says:

    I don’t understand. Govt is selling MSB and bring Malawi Dev Bank. They are all banks. Fisi ndi fisi basi

  28. The Truthful One from the West says:

    Comment A shallow and superficial write up that says nothing useful. In case some Malawians have forgotten Dr Mwalwanda was Deputy Minister of Finance when MRA hatched the borrowing scheme to hoodwink Malawians that MRA is achieving its revenue targets. Statements that Malawians should put aside their political differences is as empty as it is meaningless. What Malawi needs is a non partisan debate on what needs to be done over the next 50years. Indeed a National Economic Council that is full of DPP supporters and sympathisers would do more harm than good to the country. We need not forget that it is DPP that brought this country to its knees by April 2012.

  29. Issa Kabudula says:

    Mr Mwalwanda be made a NEC member and drive the National economic Council initiatives with an immediate effect. The man is YES a professor he has tough me in a number of areas which if managed can bring development in Malawi.

  30. emwazi says:

    He wants a job as a CEO of the Malawi Development Bank, good points raised I hope the President’s advisors will read this posting! But the vacancy of CEO will have to be advertised, no hand picking!

  31. peter muthanyula says:

    A nation of thieves can never prosper!

  32. chris says:

    Too long komanso palibe munapanga while in govt during bingu and jb

  33. sabiti says:

    Comment
    Mw can and will develop only if our leader stop to think how will they fare in next electios, Mw need pro poor polices that will benefit the poor not handouts like fisp which is not translating into anything 10yrs down the line. 75percent of the resouces meant for poor are spend on semminars only a little or nothing at all trickle to the intended poor,JB used to say you cant talk of poverty without the poor themselves. Its a good idear if this bank can save the poor witout prohibiting conditions

  34. dcs says:

    Why is he ‘former’ deputy minister kikiki

  35. malawiana says:

    You werd in Government not long ago and You never said anything like This. All You knew was chewing allowances and fighting Your Benghazi colleague.

    1. mbwaxe says:

      My freind i totally agree with you!!! Dr mwalwanda is foolish!!! Where were you all this time to write those nice ideas!!! You were busy supporting stupid policies!!!!! Pa thako pako!!!! Pa musundu pa nyoko!!! Mbuzi iwe!!!!! Now you want to start licking mathanyulas ass!!!!!! You were around when bingu was busy stealing! You were around when masten was busy presiding over cashgate!!! So what are you talking about now!!! Mbuzi iwe!!! Choli chako!!!!! Yes you have a phd but ur very stupid!!!!!!!! Lutanga mukagundanenge nachinyako chindere chili ku state house!!!! Pa thako pako iwe

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