Malawi must revert to concept of Zero Deficit Budget

Progressive developments over the past couple of months speak much of insecurity of donor aid in Malawi despite the implementation of deliberate appeasement policies to coax the masters. The media has been flooded with disturbing breaking news concerning donor aid, which despite lacking considerable evidence, complement well with the fact that some donors have actually withheld aid on various conditions. Besides, Malawi has not been cushioned from the effects of devaluation as promised. I feel these developments are a prophecy of what shall come to pass in Malawi in the fullness of time; one morning Malawians shall wake up and there shall be no more donor aid.

Donors shall never run out of reasons to withdraw aid when they want to, and where they do not have the reason, they will create some. This takes my mind swiftly back to the dawn of the unwelcomed Zero Deficit Budget (ZDB) where with somberness of mind, I rest at the feet of the late President Bingu Wa Mutharika to listen to him defend the ZDB once more.

The basic overall truth is that the ZDB failed and remain detested by many. But while we agree that the ZDB failed, it is imperative to consider why it failed. This is where we part ways.

Finance Minister Ken Lipenga: Must go back to the concept of ZDB

Over the time, through prolonged arguments with friends, acquaintances and strangers I have discovered that our opinions over the ZDB group us into two distinctive schools of thought; the first that thinks that the Budget failed because it “can not” work and the second that think it failed because it “could not”  work.

Those of the first school of thought feel the ZDB was a substitute of donor aid, and Malawi government “can not”  run without donor aid, hence the ZDB was an impossible attempt which was destined to fail, while those of the latter school of thought feel the ZDB failed because given the circumstances, it “could not”  have worked but it is a workable policy. And ofcourse, there is a third group that exist but belongs no where.  This is a group of those who until today have no slightest clue what the ZDB was/is all about; given a chance to belong, they would simply follow the majority of the two schools.

I am a proud member of the second school of thought. I believe that at the age of nearly fifty years, Malawi can wean herself from milking donors, leave the donor’s bosom and stand tall on her feet to walk away. The standing to walk will not be easy, but must stand anyway; Like a child learning to stand to walk on her own, Malawi could not have actually stood and walked on first attempt.

The ZDB was Malawi’s first attempt to stand on her own, and falling down was inevitable; that is why the ZDB failed, but quitting was probably the worst resolution. I believe that after the abrupt but peaceful transition, the best thing to do would be to perform a thorough autopsy of the ZDB and identify its flaws, improve on them, and implement it again. This ofcourse could not have guaranteed the utmost results, probably it could have failed again, but it could have been a step ahead towards economic independence.

If the ZDB was a positive step towards the path of economic independence, then why was it not embraced with hope? I feel the following are only some of the many reasons that contributed to the denial and eventual failure of the policy:

First was connotation of the Term; the use of the word Zero in the term. The word Zero usually represents nothingness and failure.  No one wishes to get Zero of something and apparently not even “Zero” of a “deficit budget”. Therefore, the use of the word zero created a psychological barrier for the people to accept the policy.

Second was Time and politics: the Budget was introduced at a time of stiff political turmoil, when the government was experiencing detrimentally sour bilateral relations with certain donors and the IMF which resulted into freezing of donor aid facilities. Consequently, most analysts believed the ZDB was a misplacement of effort and loss of direction; instead of working on the deteriorating relations (which was happen with difficulties) and bowing down to demands of the IMF to reopen aid taps, the government embarked on a trial and error policy to counter the blocked aid. So people, led by critics preferred aid to policies that seemed or were counteractive to aid.

Third was the Architect of the Budget; the late President Bingu wa Mutharika was the architect of the budget at an unfortunate time when people hated him the most. People believed, or had been made to believe that he was so evil. Whatever he said or did was regarded as being motivated by some evil in him. So when he preached about the ZDB, people thought he was only being evil and arrogant.

Forth was academic and intellectual incompetence; Malawi is one country that is over flooded with overzealous people who want to be economist when economics is discussed, be lawyers when issues of law are discussed, be politicians when politics is discussed etc..Unfortunately many lack the academic and intellectual competence to match their zeal.

This negatively affects their grasp of challenging government policies and other jargons of national interest. The ZDB was regarded as refusal of donor aid for the development of the nation, even though it was defined as a policy of funding government’s recurrent expenditure using domestic funds sourced from Malawi’s own economic activities: -just like the living within ones own means adage.

Finally, I understand that many are ready to trash this article and throw insults as  the culture demands nowadays, but I want to challenge Malawians that, donors shall one day pack and leave to take care of their own economies. There is an urgent need for collective sacrifices from all players and stakeholders of the Malawian economy to revert to the concept of a ZDB.

The starting point is; revisit and revise the failed ZDB and develop a better concept and policy out of it. This must be done now when every Malawian is eager for economic recovery before politics takes control and we can listen to each other no more. If we can not revert to the concept of the ZDB, I have no doubt that one day donors will be the one to tell to stand on our own and we shall be caught off guard.


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