The ‘he has and he has not’ of Malawi President Mutharika

One of President Bingu wa Mutharika’s very unpopular policies, Zero Deficit Budget (ZDB), though a very popular phrase in 2011, is here to stay. At least, in the interim, this is what we can all look forward to, perhaps until after May 2014.

Mutharika is not relenting on this as observed in his address to the National Assembly a few weeks ago. He asked, among others, donors to give him another three years to try home-based solutions to the economic catastrophe he has plunged the country into.

Since his address, the Malawi leader has conducted several meetings both public and private with the latest being the presiding over of graduation ceremony of over 658 secondary school teachers at Domasi College of Education in Zomba and we are still waiting to hear him tell us and donors the home-based solutions he was referring to in his mind.

This just confirms our worst fears: the ageing leader has no solid solutions. The 79-year-old man is talking and not acting while at the same time further taking the country into deep, deep crisis. While analyzing the situation, immediately, Emperor Nero, who played violin while Rome was burning, comes to mind.

Mutharika

To see what we can expect as solutions from the man who just privately celebrated his 79th birthday on February 24, the only information we have is just some of what he has done so far, and what he has not done so far during his five years of semi-democratic governing (2004-2009) and three years of dictatorial ruling (2009-2011).

He has successfully:

§  Subsidized fertilizer, which significantly improved the country’s food security and the economy. But the program has gone haywire this season because of lack of enough fertilizer to provide to the beneficiaries and also the life-threatening corruption.

§  Signed a contract with Paladin for uranium mining, which in hindsight appears unfavourable for Malawi. At the time of signing many CSOs and NGOs warned him against the consequences of the deal but he would not listen.

§  Overvalued the kwacha, which has resulted in reduced export, shortages of foreign exchange and consequently of fuel and raw materials for the industry. This has caused a big slump in the economy and worsened inflation.

§  Soured relations with foreign development partners, which has resulted in reduced development aid and significantly worsened an already precarious forex situation.

§  Enacted undemocratic and unconstitutional laws, which has worsened the human rights situation and the relations with foreign partners.

§  Imposed punitive taxes which has significantly reduced the competitiveness of our exports, and raised prices of basic commodities across the board, causing run-away inflation

§  Set minimum prices for tobacco. Predictably, in a liberalized economy this has not worked. When he found this out he deported some senior tobacco buyers. This, as any economist will tell, has led to less demand for the leaf in Malawi and consequently insignificant sales and lower prices. The poor farmers are the biggest victims of this policy by Bingunomic engineer, Ngwazi Professor Bingu wa Mutharika, woyee!!

§  After inflicting enormous damage to the tobacco market, he decided to celebrate the same to the cotton market. He set minimum prices and to nobodies’ surprise: if you do the same thing twice, you get the same outcome twice. Large amounts of cotton went unsold, and rotted away, leaving the poor cotton farmer with nothing for his sweat and investment.

§  Initiated the construction of the Nsanje Inland Port (at billions of tax payers’ money). Malawians, and the entire world, are still waiting to see when the first ship will dock. It now functions as a monument to his self-importance with boys turning it into a fishing ground and washing bay.
He has successfully not: 

§  Diversified the economy

§  Enacted zero tolerance on corruption

§  Developed Malawi from an importing and consuming nation into a producing and exporting one, as he has always claimed

§  Traded the currency at a realistic level (which in practice means devaluation)

§  Shown any long term development policy or economic policy

§  Negotiated a strong and beneficial trade agreement with Europe after the expiry of the EBA (Everything But Arms) agreement. Europe was willing to negotiate an EPA (Economic Partnership Agreement) and extended the EBA agreement several times, but the Malawian leader has come up with nothing but delays, until Europe pulled out of negotiations that were going nowhere.

The image that comes out of this he has and he has not is that after the fertilizer subsidy programme in 2005, Mutharika has not had any ideas on development policy and has enacted only reactive economic policies rather than pro active ones.

His inaction and lack of visionary leadership, being witnessed now, is swiftly tearing down the country’s economy which he unfortunately helped to put together. So we can only hope (or agitate) for a swift change in policies, no more Bingunomics, to save the last bits of the country’s economy.

Another three years (longer than his remaining mandate! – expires in two years) of this inaction and destructive incompetence will just result into numerous deaths of Malawians due to lack of drugs, food insecurity, and money in pockets across the board. Cry my beloved Malawi.

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