=Malawi’s President Joyce Banda has had 12 tumultuous months since she took office in April last year.
She has attempted to right Malawi’s economy by devaluing its currency, giving herself a 30 percent pay cut and proposed to offload a fleet of Mercs for her 35 member cabinet.
But the economy has continued to sputter despite the reforms although central bank Governor Peter Chuka has remained optimistic that the economy will start to stabilize from mid 2013.
Commodity prices have gone up and pushed inflation to 36.5 percent in March; higher than the IMF forecast.
Since she took over, the cost of living in urban Malawi for a family of six now needs $200 per month to meet basic food needs, ten times more than the monthly minimum wage of $20 for many.
President Banda has, however, remained resolute and believes that she has laid the foundation for stronger exports and 200,000 new jobs by 2014—the same year she’s seeking re-election.
But the reality is that she has become a darling of the West and back home there is growing anger and disappointment as many families struggle to earn enough either because they lost their jobs or simply have become too poor as a result of soaring commodity prices.
Armed robberies have spiked in recent months because many people have lost jobs. Incidences of mob justice are also on the increase because communities feel that police are not doing much to help. All this is being blamed on Banda and the IMF.
Last week two suspected armed robbers in one of Lilongwe’s most populous townships were caught and set on fire.
“This is the fourth incidence in just two weeks and it’s worrying us,” police spokeswoman Rhoda Manjolo said.
Police confirmed that crime is on the raise and that communities are now taking the law in their own hands.
“We always see these trends when times are hard and this is does not happen only in Malawi but many other countries,” Manjolo said.
The Malawi Economic Justice Network (Mejn), a think tank and economic watchdog, says IMF programmes have hurt the poor more in Malawi than helped to solve economic challenges the country faces.
“Despite the two programmes bringing some positive results, the overall assessment is that they both flopped in several areas and hurt the poor masses even more.
In all fairness, the effects seen in the economy are more of the ‘without’ IMF facility than the ‘with’ facility scenario,” said Francis Ng’ambi, one of the founders of Mejn.
“Devaluation is not an economic policy it is only a solution to a symptom of a problem and has to be implemented along other supporting policies. Malawi’s default was probably because that these agreements are pitched too high for us,” said Ng’ambi.
“The social sectors are the ones that have felt the most pitch of dwindling services, for instance delivery of medicines,teaching and learning materials in schools. This is a direct result of the shortages of both fuel and forex.”
ESF was a one year US$77.1 million financial assistance meant to help Malawi address external shocks following the rise of fuel and fertilizer prices due to the 2008 financial global crisis while the ECF is a three-year US$79.4 million facility meant to support the country in its medium term reforms, address balance of payments weaknesses and sustain growth and poverty reduction.
The ESF was abandoned mid-way due to lack of adherence to set targets while the ECF went off-track in 2010. On Tuesday this week the IMF and Malawi Government announced that they have agreed on a new three-year ECF programme.
Ng’ambi, however, said for an appropriate way forward on these programmes people of this country, through their MPs, should be involved in the negotiation process so that parliament should be able to monitor the implementation of the programmes and their impact.
He also told the Parliamentarians that it was high time that Malawi has to look at other alternatives to solve its long standing economic problems such as a review of its exports and imports to find a way of replacing all unnecessary imports with local products.
Action Aid’s Advocacy and Campaign Coordinator Chandiwira Chisi said the research was aimed at analysing the two IMF facilities and find out the impact on social service provision in the country.
“The IMF is now back in town and the question now is; will the agreements be done differently, what would be the level of input from the people through their MPs and to what extent can we engage to our benefit?” asked Chisi.
During her first ever visit to Malawi in January this year, IMF chief Christine Lagarde urged Malawi to stick to economic reforms that have stoked inflation and made President Banda unpopular.
“There has been huge efforts undertaken by Malawi government and the Malawi population and its really important to stay on course,” Lagarde said when she was in Malawi.
President Banda has admitted that because of the IMF reforms, people are hurting. “But we have to go through this for us to start doing better and move our people out of poverty.”
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