During the just ended sitting of Parliament an opposition legislator from the Malawi Congress Party (MCP) Willard Gwengwe alleged or rather exposed to the nation that our government currently has an external debt of about K150 billion.
Repeatedly I have heard our honourable members debating on various loan authorization bills that have been tabled in the august House but I must admit that when the opposition Parliamentarian, who is also his party’s spokesperson on education, mentioned that figure my heart jumped from its place.
Obviously the figure was too much for my country and my liking. And indeed for many other thoughtful Malawians because the mount is alarming for a country that is already on its economic death bed.
Carefully listening to the parliamentary proceedings, one would swiftly conclude, the way I did, that the ruling Democratic Progressive Party (DPP) government has developed an appetite for external borrowings and the move is brewing a burden too much for the country to handle.
A country may need to borrow money, yes. Best this is invested in development projects that may later bring in some or more money than was originally borrowed, which can be used to pay off the loan.
But I wonder if these debts are going to be sustained and are used for their intended purposes or the MPs are just used as coats to “dress up” Thyolo as we are witnessing already with the Lilongwe University of Science and Technology (now Mikolongwe University of Science and Technology- MUST), the Bingu wa Mutharika Road (Malowa-Goliati-Chiperon Road) and the “White House” Ndata Farm, among others.
If a loan is taken and used for consumption, paying it off is a problem. The money to pay off is not there, and the country gets into trouble, as is the case of Malawi. Much of these loans are used to purchase fuel (which is consumed) and other perishables. This is not investment, this is consumption and you would expect any economist to know that is not recommended in any economic system.
Debts incurred too much are bad for the country and bad for the inhabitants as well. Now one wonders how he got his title- or did it come the way Dr Bakili Muluzi conferred on him the title Economic Engineer? Perhaps they taught him nothing or should we conclude he totally forget everything? The man is 78-years-old and Joyce Banda may have had reason when she requested him to be examined for dementia.
A large debt burden makes the inhabitants poorer. If a government spends more money than it gets in it will have to borrow the difference. This is called a budget deficit, or in short, a deficit. Many governments strive to spend no more than they get in, and this is called zero deficit.
This means a government does not need to borrow money and will not burden future generations with their debts. But the DDP government is doing something very different- it gets in very little money (due to its sour relationship with donors hugely because of Mutharika’s arrogance- think of the Cochrane-Dyet story) and its bad governance (think of the Robert Chasowa, murdering of 20 unarmed demonstrators, violating human rights, raping the constitution etc).
On top of this it has come up with a ridiculous budget of sky high taxes that is speedily destroying the private sector. And of course Mutharika’s reckless ideas on devaluation (never devalue, no matter what!) which is causing a gigantic shortage of forex in turn ensuring there is a perennial fuel shortage, no raw materials or no importation of spare parts, the whole economy is in tatters.
So what is Mutharika doing? Borrowing left, right and centre. Now the lenders know that Malawi is in a bad shape. There is no clear answer how and when a country with such an economic failure and such a suicidal economic policy (thanks to the Economic Engineer) is going to pay back.
The lenders are not crazy to amass enormous amounts that are needed to cover for the deficit of this economic scorched-earth tactician.
Mutharika could never amass so much money because it is now a bare fact that he does not understand financial policies that is why he has completely messed up the once-shining economy of Malawi. So those lenders know what exactly you and me do- Malawi is not credit worthy.
How can you seduce anyone to lend you money anyway? It is simple- promise super high interests. And that is what these lenders are charging. Mutharika is throwing Malawi deeper into very unfavourable conditions.
Future governments are going to be in even worse trouble because of the irresponsible policies of the Economic Suicide Terrorist.
This DPP government is not implementing a zero deficit budget, it is doing exactly the opposite: it is putting us into debt while happily watching and ululating as a few citizens from the MTL belt (Mulanje-Thyolo Limited) plundering the government coffers.
What does the economic simple-mind know? Or care? He just lambasts everyone from ordinary citizens to civil society leaders to opposition politicians to previous governments to donors to IMF the list is endless before calling for his regime thugs to deal with anyone who exercises his or her freedom of expression.
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