Of Ligoya’s US$200m, the folly of pumping a punctured tube and common sense

Preamble:

Malawi is this year running on a budget dubbed a “zero deficit budget”. Supposedly a road map to economic independence, it is causing untold misery on the masses while its champion – the President – can afford a long holiday in Hong Kong.

The president’s men are also dreaming in colour, spending lavishly on luxuries like multi-million Kwacha swimming pools, when hospitals are prescribing aspirin for malaria. When the president’s men can spare time, they are either giving the public conflicting information on the country’s economic woes or worse, they are busy strategizing how to increase their take from the sick economy, whilst ordinary civil servants are languishing under the yoke of increasing cost of living.

The question is: as a people, are we going to survive and how?

Read on.

Ligoya: Malawi needs $200million

The Governor vs. the Finance Minister:

Dr Perks Ligoya, the Governor of the Reserve Bank of Malawi, recently told the nation that Malawi, beset by serious shortages of foreign exchange, medicines and fuel, needs some $200 million between now and December to fix the economy.

“This (the US$200 million) will unlock a lot of the blockages that have built up in the system,” he told reporters at a news conference in Lilongwe.

Ligoya further said: “For as long as we get enough money to get all the backlog of fertilisers, pharmaceuticals and important government imports, the $200 million will take us through and all  should normalise things between now and Christmas.”

What he did not say was where Malawi was supposed to raise this money from; who was responsible for raising this money, and why those who are responsible for raising this money have so far been unsuccessful.

His counterpart, Dr. Ken Lipenga, the Finance Minister, recently rubbished suggestions that adoption of the zero deficit budget (ZDB) is what has plunged the economy into the mess.  Dr. Lipenga is reported to have told Zodiak Radio that there are several other factors that have led to the current situation which, he said, “government is looking into” – whatever that means.

“The problems we’re facing now have been caused by factors which we all know, like shortage of forex, fuel and these have also affected other sectors of the economy,” he said – without going to the root of any of these “factors”.

One might ask: if on top of what was provided for in the budget to run Malawi’s affairs in this fiscal year, we are still short of US$200 million, where is this shortfall coming from? And technically, what is this shortfall called? Or more pertinently, why was this not factored into the budget so that from day one, someone would have been assigned (and paid) to look for it?

Duplicity and extravagance: 

While both men seem to agree that Malawi is in trouble, and this is to put it mildly, one is being blunt and honest, and has seemingly adopted a pragmatic and quantitative approach: Malawi is in dire need, and US$200 million will do the trick, the RBM Governor is saying.

And anyone who has not been following developments at the Central Bank would say “This is the type of thinking and medicine we need to heal the ailing economy”. But as it is, the gentleman coming up with this prescription is preoccupied with, among others, construction of a posh and state of the art swimming pool in his backyard. Who, other than a fool, can take Dr Ligoya seriously?

As if to prove the government’s lack of seriousness and urgency, his counterpart, the Minister of Finance, is busy trying to defend the indefensible premature adoption of the so called ZDB. He wants the country to believe that the ZDB should not feature in the equation and he is obviously wrong, very wrong.

The farce called ZDB:

And here is the reason: the fact that the government now realises that all is not well, despite claiming otherwise, despite climbing on hill tops and despite jamming “sovereignty” down everybody’s throats about  six months ago; can only be attributed to one thing: poor planning. The blue print that the government concocted to guide the nation from poverty to prosperity was fake.

No two ways about it: the ZDB was not only premature, but it was very wide off the mark and an extreme exercise in futility, and the world is now laughing at us.

Follow-follow-follow, follow the leader:

But well, let us forget this – to err after all is human. Let us adopt a positive approach. With this turn of events what we really ought to be thinking about is: how can we remedy the situation. The RBM Governor, when he wakes up from dreaming about himself and his family basking in the sun by a swimming pool, seems to have some ideas.

First he says, we need to raise US$200 million. In other words he is saying, let us admit that the budget has a deficit of US$200 million, and then bang our heads together to find a way to raise this shortfall. And perhaps this is where we ought to start.

And this takes me to the next question and the crux of this write up. What guarantees are there, to ensure that the US$200 million, if raised, will not be used to finance:

·        yet another US$500,000 shopping spree, may be this time in Lisbon?

·        yet another swimming pool? If the RBM and MRA bosses have set the trend, what and who will stop the MACRA, MBC, MERA and other statutory body bosses from following suit?

·        yet another purchase of some unwanted spying machine when hospitals have no drugs?

·        the unbudgeted for increase of parliamentarians perks?

I could go on and on, listing the sort of excesses that the government, under the “wise and dynamic” leadership of President Bingu wa Mutharika has now turned into an art. But the above examples – without referring to the presidential jet and a huge appetite for globe-trotting  – more than suffice.

The thing is: all that the president’s men are doing is that they are simply following the example set by their boss: they are all in “likaomba wotherathu” mode.

If the appointing authority does not care, and if, on the contrary he and his wife are living it up like royalty, why should they care and why shouldn’t they have, at least, state of the art swimming pools in their backyards?

Ligoya’s sense of wisdom: pouring water into a leaking pail

Coming back to our colleague dreaming in swimming-pool water colours, the Reserve Bank Governor, he should not be talking about raising US$200 million, or any amount, as a solution to the ailing economy. This is because, any amount of money that found its way into the national coffers, under the current regime will be squandered quickly.

With the laissez-faire attitude that has become the order of the day, the president and his men will spend such money  on expensive holidays, swimming pools, purchase of spying machines, and a host of other useless things that are not national priorities given the state of our economy. None or very little of it would make a difference in the ordinary people’s lives.

Ligoya and Lipenga should first plug the holes, seal the leaks; then and only then, go about seeking assistance.

What then: everyman for himself or love thy neighbour?

All our traditional donors are aware that the ruling party will, between now and 2014, be using every trick in the book to make money to finance its campaign for 2014. And this is why very little will be trickling in therefore, we ought to brace for even harder times. “Ali ndi mwana agwiritse!”

The global meltdown notwithstanding, any donor that has tangoed with Malawi for some time, knows how ruling parties in Malawi (and in Africa generally) behave when elections, especially momentous ones, like the 2014 General Elections are getting closer.

The only thing that you and I can do, is to revert to and reinvent our old survival system. Let us revive the extended family support system and try to hang on until 2014; when after suffering extreme hardship Malawians will hopefully have the sense to vote out the ungrateful and clueless DPP government.

Conclusion:

To conclude, I will borrow Mzati’s phraseology, all this is common sense. Forget about Ligoya and his swimming pools, concentrate on your survival and while you are at it, try and help your kinsmen, friends and if you can, those that have no one to turn to.

Blessed is the hand that giveth, than the one that goes about looking for a US$200 million that will not materialise for the simple reason that the givers know that if they provide it, it will either go down the drain or end up in the wrong pockets. No man in possession of all his faculties, will try to pump a tyre that is full of punctures.

I rest my case.

Wise One from the East

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