Smell the coffee, Mr. President!
“If there are two or more ways to do something, and one of those ways can result in a catastrophe, then someone will do it” – original Murphy’s Law
“If anything can possibly go wrong, it will go wrong. And usually at the worst time.” – variation of Murphy’s Law
The last breath of hope for Malawi from the IMF has been snuffed out. The Extended Credit Facility (ECF) program is still off-track and might be considered early next year – 2015 – subject to another review and subsequent presentation to the IMF Board.This program, though not worth much in relative terms at a total value of USD150.0 million, is a signal to donors and development partners that a country is “good-to-go” for assistance programs and this can unlock substantial budgetary and development cashflows. But the writing was already on the wall and the IMF stand last week did not come as a surprise to most people who have been following developments closely since the donor freeze in 2013under the Joyce Banda administration.
The IMF fine print indicates that the ECF program has virtually been scrapped and will probably have to be re-negotiatedat some unknown future date. In addition, all major donors have clearly stated that there will be no direct budgetary support to government in the near future. It is, therefore, only proper to call a spade a spade and construe that we could be heading for a Technical Knock-Out (TKO) as ourgovernment may, technically,not survive without financial support. How will it finance its activities and meet its responsibilities and obligations, especially in health, education and sanitation? How about the sensitive, untimely and ill-advised salary increments for civil servants, exorbitant packages for MPs and cabinet ministers?
And what about potential awkward increases of salaries and perks for the judiciary as their junior officers have – given the profile of ongoing CashGate cases – strategically held government to ransom by virtually closing all courts as part of their strike action?Billions in long overdue payments to the private sector? Payments for strategic imports at higher exchange rates, which will exacerbate the initial MK107.0 billion budget deficit? The burden of demands on government are huge visa vis its resource envelope, especially against stagnant or declining tax revenues as business activities slow down due to an unfavourable climate.It might just take a straw to break the camel’s back.
The Peter Mutharika DPP administration is caught between the devil and the deep blue sea. On one hand, its survival is threatened by continued aid withdrawal due to a still porous public financial system that led to the many cases involving over MK20.0 billion 2013 CashGate and related fraud, money laundering and corruption scandals that are yet to be convincingly prosecuted; on the other, it is paralyzed by the fear of the known and unknown skeletons in its closet that could be revealed by the German-sponsored PriceWaterhouse International forensic audit.
Speculation is rife that this investigation could implicate very senior past and present members of the party in alleged scams involving billions of kwachas from 2005 to 2012. This audit has become another pre-condition for resumption of donor support and presents the government with a CATCH-22 situation where the DPP administration now finds itself in that peculiar position where “you are damned if you do, and damned if you don’t.”Sympathetically, one can only imagine the probable immense pressure and torture of sleepless nights that has befallen President Mutharika and his inner circle amidst a deteriorating economic scenario and strident public calls for decisive action.
In the medium to long term, we need to become economically independent by producing more goods and services for both local consumption and for export and reducing our appetite for all things foreign; the ultimate is to become a net exporter with a favourable balance of payments. Until such a time, donors will remain indispensable and illusions of self-dependence are, for now, just that; we still need them to survive.
Given Malawi’s current precarious economic and fiscal position,strong, effective leadership is vital, so here is my short-term survival strategy pro bono advice to President Peter Mutharika: wake up and smell the coffee! And urgently engage a high gear to address donor concerns. Otherwise, you could unwittingly fall prey to a subtle undercurrent that could become an over-powering tidal wave created by the gravity of peoples’ disaffection with the political elites, high-level corruption and worsening economic realities.
Simultaneously, effectively engage the Malawian people, opposition political parties and other stakeholders and bring them on your side to create one united Malawi front. Stir up the fervor of nationalistic pride against some nebulous local and international enemies that do not wish you, your government and Malawians well.
Communicate a shared prosperous vision for Malawi and appeal to the emotions of pride, self-esteem and the virtues of hard work, sacrifice and discipline. Mount an aggressive PR campaign replete with professionally-staged monthly Presidential Press Conferences and regular national press events, debates and interviews to keep the citizenry informed. Keep the connection with the people alive. Cover all the bases. Be more intelligently vocal, visible and accommodating of constructive opposing views. Continue to engage donors as equals and not with a beggar mentality. And please personally ensure that your government seals loopholes in it’s financial systems, like yesterday!
Finally, employ some “moral suasion” and provide resource incentives for the judiciary to hasten prosecution of CashGate cases and any current or emerging trials under all previous administrations without fear or favour. In the quest to reclaim donor confidence and endure, note that beloved sacrificial lambs will have to be offered to appease “the gods.”Time is of the essence.
The ball is in your court, Mr. President.
It’s your call.
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(ChikavuNyirenda 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).
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This article is only about form, and not about content. PR campaign, engage the opposition, but it does not spell out what a president can do in his situation. The only way to bring back forex into the country in the short term is donor support, and that is conditional on cashgate reforms (possible) and investigations that will probably implicate the president’s inner circle. And that is a hairy issue for which this article gives no solution.
grt
I have had a nasty day today . Galimoto yanga was nearly smashed by rioting school children in Blantyre . But after reading Che Spindulo’s comment, I could afford not only a smile, but a big long laugh . Che Spindulo woyee!
What is this BigMan? You are silent. We want to hear from you. You used to say JB was/isc clueless!
Let the president get lid of all the chuffs, whether politicians or officials even if they are DPP. You are the president of the Country more than of DPP. It is not in the time of Adolf Hitler when he used emotions for many and reserved reasoning for few. These days Mr President you have to reserve reasoning for many and emotions for few. Once Kamuzu said that he would pick a minister from the street, but not a PS. I did not understand then, but now i do. The problem we have at hand is so simple. We have… Read more »
APM has very limited leverage on how the economy can turn around. The solution is simple, prosecute the cashgate cases swiftly and allow the audit dating back from 2005 to be conducted. Prosecute those that will be found to have done wrong even if they are DPP executives. The unfortunate part of all this is that DPP will cry politics instead of smelling the coffee and realizing that this is the mess they left JB with. Also it’s sad to see that donors are pushing causes which Malawians should have been in the fore front pursuing. We need to hold… Read more »
Wagwanayo wagwanayo
Easier said than done. The writer of this piece is right on the mark. The problem with our country is not due to lack of solutions. But rather it is due to lack of political will by APM. He does not have enough guts to put his own balls on the barbecue. He knows that allowing the system to operate with expedience would mean roasting his own balls faster than he would other wise have liked. He is praying that the judiciary will delay these cash gate cases even longer so he can buy time. Unfortunately time is not one… Read more »
Unfortunately APM has surrounded himself with the same people who were ill-advising his late brother. His repeated statements are like a president who is Clueless. He talks by jumping from one topic to another without a clear vision of what he wants to bring across. He leaves listeners wondering if he is a presidential material.
Anthu ena akunena kuti APM ndi oziwa mulungu. APM sioziwa mulungu chifukwa anambela mavoti.Mulungu safuna kuba. Tikunena za CASHGATE kodi sinkuwona kuti anthu sopano akuyimbindwa milandu. A malawi tivutika chifukwa otisogolara ndi wakuba. Tisalire
MEC BOSS OWES MALAWI AN APOLOGY. SPIT THE BUN AND APOLOGISE. SINCERELY NOT WITH CROCODILE TEARS.