The curious curse of donor dependence: Malawi situation

“It’s the economy, Stupid!” – James Carville, Campaign Strategist for Bill Clinton’s successful 1992 presidential bid

One cannot help the nagging feeling of “déjà vu” given our fast deteriorating economic and fiscal scenario following the withdrawal of direct budgetary assistance under Joyce Banda’s PP administration which has spilled over to the new government. There is an eerie sense of history repeating itself, a premonition that we have been down this road before.Fate of the kwacha

Under every regime since independence, we have seen donors withholding their purses, and this has, invariably, led to economic hardship for Malawians and significant changes in the socio-political landscape of Malawi. Reasons for  withdrawal of aid have ranged from human rights abuses and in support of democracy during Dr. H. Kamuzu Banda’s reign, to rampant corruption, lack of respect for the rule of law and accountability under Bakili Muluzi, executive arrogance, intolerance and governance issues with Bingu wa Mutharika and, most recently, unprecedented financial scandals known as CashGate, JetGate and MaizeGate under Joyce Banda.

Smarting from the unexpected loss of power following the sudden death of Bingu wa Mutharika in 2012 and the humiliation of having its leaders arrested and vilified under Joyce Banda’s rule, the DPP faithful regrouped and masterminded a contentious come-back in an elaborate campaign and election strategy that left no stone unturned. Come May, 2014, two years after Bingu wa Mutharika’s death, the DPP was triumphantly back in power under Peter Mutharika!

But the donors have remained adamant on resumption of aid until there is full transparency and accountability with regard to moneys plundered or alleged to have been stolen from government, now from as far back as 2005. President Peter Mutharika and the DPP administration inherited the heavy aftermath of CashGateet al and donors have added another weight by requesting – and providing funding from the Germans – for a forensic audit by PriceWatehouse International to unearth any abuses from 2005 to 2012. This is, coincidentally, the time that the same DPP was last in power.

Can one blame the donors for “abandoning” the Malawian people following the massive looting of government coffers? Perhaps not. In principle, it is purely a question of ensuring adherence to acceptable standards of moral integrity and fiscal prudence. Mind you, donors are also accountable to their taxpayers who are keen to know whether their moneys are benefiting the poor or enriching an elite cabal of selfish and greedy individuals. They, therefore, expect the highest levels of honesty, integrity and conscientiousness from our political leaders and public office bearers. So, ostensibly, the agenda for donor withdrawal is upholding ideals of democratic principles, rule of law, transparency and accountability.

To their credit, and in an act of good faith, our benefactors have not totally ditched us; they are still willing to support social and development programmes directly without channeling resources through the government’s leaking bucket.

Whilst our leaders are most culpable for betraying our trust, we, collectively as Malawians, are equally complicit and have only ourselves to blame for the withdrawal of budgetary support through our actions and inaction. We need to take ownership of our problems and ensure that our leaders address both our concerns and donor disquiet timely to regain lost trust and confidence. As troubled and burdened Malawian taxpayers we must, simultaneously, demand full accountability, punishment, recovery and reparation for and/ or of the unprecedented shameless thievery. And hold our leaders to account.

It’s noteworthy that, all over the world, donors do not usually directly interfere with the local socio-political dynamic. However, they can influence the agenda by withholding aid or imposing sanctions, thereby creating a state of affairs that may result in commotion, coerce compliance to set conditions or lead to significant political transformation. Our own history provides adequate positive correlation between donor withdrawal and seismic changes in the political and socio-economic landscape. It has become a vicious cycle. It is up to us, as Malawians to offer support to, and by our actions, to patriotically compel the government to break the curse and collectively craft a way out of our current dilemma and forge a more inclusive and prosperous future for Malawi.

Economically, the aid withdrawal has started to bite hard and Malawians are, once again, suffering. We are already seeing the signs of an economy that is heading for disaster – a rapidly depreciating currency amidst insufficient foreign exchange reserves, high inflation, already high interest rates expected to go even higher with the recent increase in the central bank policy rate from 22.5% back to 25%,continuous increases in the cost of living, an eminent increase in fuel prices that could further exacerbate the general price increases and spark wide-spread calls for wage and salary increases, increasing unemployment, increasing insecurity and indications of economically unsustainable increased government borrowing to finance recurrent expenditure.

Given the above, and in the spirit of “United, we stand; divided, we fall,” let us, together, urgently and concretely address donor anxieties and solve our looming national crisis. This impinges on Peter Mutharika, as president, to show strong, proactive leadership and to be courageous enough to accommodate “unpalatable” truths and good advice, to be sensitive to the peoples’ concerns and public mood, to be decisive and to take hard decisions that may even be unpopular with some within his own party; to do what is right, and not necessarily what is expedient, as a matter of survival and in the best interests of the nation.

Just like in the touching, highly acclaimed movie, ”The Curious Case of Benjamin Button,”it would appear that the older we grow as a country, the more retrogressive we become  as a nation; it’s a question of two steps forward followed by three steps backward at every turn. It’s time to change and chart a positive way forward.

And right now, we are sitting on an economic and fiscal time-bomb with potentially disruptive political ramifications.

Tick! Tock! Tick Tock!

Please don’t shoot the messenger.

CJN

  • Feedback: [email protected]

(Chikavu Nyirenda is a Senior Lecturer in Banking and Finance at The Catholic University of Malawi and contributes, in his personal capacity, a weekly column, ‘Views from the Sunset,’  which is published in ‘The Daily Times’ every Monday).

Follow and Subscribe Nyasa TV :

Please share this Article if you like Email This Post Email This Post

More From Nyasatimes

More From the World

16 thoughts on “The curious curse of donor dependence: Malawi situation”

  1. Fathi Alshab says:

    these discudsions getting too emotional dometimes..lpointing ti ina fact that some malawians are hurting & our leaders think its normal even ze church clergy guys cinfysed lot too!

  2. Kholowa mkabudula says:

    Anthu akamatinena kuti a malawi ndife opusa ngati amkanama,we don’t see any problem in that but mimicking. We are a nation l fail to describe!

  3. Cicero says:

    I want to agree with Mr Chikavu that indeed we Malawians contribute 45& to malaise of our problems. Why can’t we just burn houses of all these thieves called politicians feed them to the crocodiles & start new life with no immunity to the number thief called number citizen. People have done in Burkina Fassou why can’t we did it here(sig-MULUZI)

  4. Medrian Kaunda says:

    I cannot believe this meek passive replies here. Turning the other cheek, praying that God will one day etc. etc. Totally lame and free and no change and go to church and pray once more. You have to think 20th-21st July, please wake up Someone sacrificed their life for YOU.

  5. Kenkkk says:

    While I agree with most of the issues you have raised, I just don’t agree with your graph analysis on the four presidents. The Kwacha was strongest under Kamuzu because he ran our economy better than any other leader that followed him. The Kwacha to dollars or pounds was really competitive under Kamuzu. Also you are not comparing like with like, Kamuzu ruled for 30 years but you only chose 10 years. Despite that the Kwacha was still strongest under Kamuzu.

    Are you just favouring your fellow economists? By the way I am also an economist but I don’t agree with your analysis. I think if you give praise it should go to the finance minister as well at the time of Bingu who was Goodall Gondwe, also an economist. But remember the same two economists brought this country down!!! So I can’t say the economy was better if the country came down!!!

    Remember most countries were ( are) not run by economists and were (are) doing far much better than when our economy was (is) being run by two economists. Goodall is at the helm again!!! Any better? We will see after 12 months!!!

    Who governs an economy better is not as simple as meets the eye or as your graphic analysis shows!! There are many complex combinations!!! The most important thing is the strength of the Kwacha and if they can bring its strength to Kamuzu era, then I will say they have performed!!!

    1. Mkandawire says:

      Bwana “kenkkk” Nyirenda , the writer of this article, has done nothing wrong here. The problem is with us Malawians because we can’t detach ourselves from our perceptions and prejudices. We are strongly brain washed that Kamuzu was better than anybody else to the extent that we can’t accept otherwise even in the face of reliable available evidence. Nyirenda is just showing us what the really data say. In research we don’t force ourselves to accept null hypothesis when the results show that we should reject it. Give us the new data to support what you are claiming, otherwise Nyirenda is right.

      1. Kenkkk says:

        I am afraid you are not convincing me. My only option remaining is to agree to disagree!!!

  6. Namacherenga says:

    I don’t see anything new in this article. What exactly should the president do? What would Chikavu Nyirenda do if he were president. Otherwise it is a waste of time reading some of these articles.

  7. Mkandawire says:

    Kamuzu=181% (9yrs); Muluzi=2312.9 (10yrs); Bingu=51.3% (8yrs); Joyce=155% (2yrs).

    Looking at the statistics about the depreciation of our currency in the graph above in this article, my conclusion is that it is good to be led by an economist than wembawemba people. According to the statistics in the graph, Bingu wa Mutharika is outclassing even Kamuzu. Mmmm Bingu was a true economist. If Nyerenda had factored in devaluation Joyce would have been the worst president ever in terms of currency management (International Economics). Even APM, though we don’t have the figures yet, never match Bingu wa Mutharika. Tribal hatred aside, we had a true economist in Bingu not these banana theory economists we see in town.

  8. Anonymous says:

    Let we learn to stand alone for how long we will depend of other people to help us, donors there are doing right to teach us lesson to be self dependence

  9. Very good article.

    I have one problem. What measures have been put in place to take our country out of the donor dependence trap which we have not been able to defeat for 50years? Is it because our leadership is happy with the situation? Or is it that we don’t have a clue as a nation as to what to do? If that is the case, why do all those parliamentarians meet periodically? What do they discuss, and is it of benefit to me as a commoner? Our over dependence on aid is sickening and embarrassing at the same time.

    What is also painful is that we are not ashamed. To the extent that these cashgaters have no conscience. What is becoming of our nation? How do we remedy these major issues?

    It is obvious from the above that there are many of us who are happy to just go to bed, wake up, claim an allowance for a “workshop”, without making any tangible development to our beautiful nation. This needs to be stopped.

    How much have you brought to the country in terms of foreign exchange earnings for goods and services this year? Or have you just consumed. Why should it be that poor farmer out there in the rural parts of our country who produces all the forex for you to spend on your luxury goods, when you cannot even generate one dollar from a single export?

  10. CHEWA FEDERAL FRONT says:

    Yeah, … Tick! Tock! Tick!
    Malawi will never get out of its poverty trap because it has little to sell to the world. The tobacco produced mainly in the Central Region and Rumphi/Mzimba(North) can not generate enough dollars for 16 million people.
    Funny thing, some whole villages and districts are dependent on vending. Why should someone travel from Nsanje or Mwanza or Zomba to Kasungu only to be a vendor? They will say “there is more money in the Central Region”. So, why does Kasungu have more money than your district and they will say, “er … Dr Banda…er…”
    Unless the Malawi Govt addresses the problem of idle/passenger districts we are Doomed. Invest in these districts so that out of their efforts the country may earn dollars.
    Currently, hard-working districts like Kasungu are being weighed down by idle ones. This is why MCP will not waver in its quest for a Federal Malawi.

  11. Nyasa says:

    Mmmm… I don’t know what adjectives to use to describe this article. Thank you Nyirenda for not wasting my time in reading your article. It is well-balanced. You have articulated issues with no emotions like what we see on this forum. You are a genius dude. No wonder you are a lecturer. Keep on writing. I think our leaders will learn something from your writing. The graph above is a true description about the policies implemented by our former leaders. This graph has a lot of stories to tell. APM you can choose to change this or continue worsening it.

  12. The Truthful One from the West says:

    I totally reject the blame that the writer puts on ordinary Malawians. There is not much ordinary Malawians can do when the system is overwhelming against them. For example 64% of Malawians did not want Peter Mutharika and his DPP to rule Malawi for a very good reason-DPP is the party that brought Malawi to her knees by April 2012. However the system (or law) is that a president is elected through the first past the vote and whoever gets a simple majority becomes president. Secondly the largest number of voters are in the Southern region where Peter Mutharika comes from the south and he is lomwe by tribe and his DPP benefitted not only from the numerical advantage but also a regional and tribal vote. Thirdly Peter Mutharika and his DPP squarely and directly shoulder the blame for the deterioration of the economy. Afterall they are in charge. Furthermore when Peter Mutharika and DPP were campaigning they knew the problems and openly promised Malawians that they are better prepared to tackle the problems and Malawians should trust them with the mandate to rule and that is what Malawians have done. Let Peter Mutharika and DPP deliver what they promised Malawians. They cannot backtrack now. Fourthly if Peter Mutharika and DPP based their promises to Malawians on donors resuming aid then this was a strategic blunder on his part. The donors made it very clear in a subtle way that whatever government comes into power after the elections they will wait for sometime to assess the new government’s commitment to proper public finance management, rule of law, good economic and political governance including upholding of human rights before resuming budgetary support. And DPP should be the first to know that when they suddenly lost power in April 2012 due to the death of Bingu wa Mutharika its relationship with donors was at its worst and the economy was on its knees. The mistrust of DPP by donors did not end because DPP were outside government. That is why donors want accounts to be audited from 2005. If DPP has objective advisers(not handclappers-atidye nawo) this is what they should be advising Peter Mutharika.
    Therefore don’t blame ordinary Malawians as they are powerless and innocent. As the economy is going down the blame is on Peter Mutharika and his DPP. Malawians cannot blame donors but Peter Mutharika and his DPP.

  13. FEUDALISM OR SECESSION IS THE ANSWER TO ALL THESE PROBLEMS THE COUNTRY IS FACING NOW !!!

  14. Kenkkk says:

    Very fair comment!! Are you listening Our president? Inunso Ma advisors mwamva? Yes, You so called presidential advisors, that is how you advise the president on such issues as donors and cashgate? Have you done that? Please do so if you have not!!!

Comments are closed.