Malawi needs about $500 million to get out of its economic crisis and requires Western help, but the PresidentÃ¢â‚¬â„¢s vilification of donors dampens the rescue package possibility, diplomatic sources have indicated.
Senior diplomats, in separate interviews, on Monday in MalawiÃ¢â‚¬â„¢s capital, Lilongwe, said the donor community plans to meet shortly to discuss and analyse the PresidentÃ¢â‚¬â„¢s statement over the weekendÃ¢â‚¬â€that they (the donors) are funding groups to stage protests against government.
In his address at Goliati Trading Centre in Thyolo on Sunday, when he officially inaugurated the Malowa-Goliati-Chiperoni Road, President Bingu wa Mutharika said he is tired of continued insults from members of the opposition, civil society organisations (CSOs) and non-governmental organisations (NGOs). He also blamed donors for allegedly supporting some NGOs whom he claimed want to cause confusion through demonstrations.
Said Mutharika: Ã¢â‚¬Å“They have been insulting me and I have not hit back. If you think IÃ¢â‚¬â„¢m issuing threats, take it as you like. Enough is enough. I will not accept this nonsense any more. I understand they have organised demonstrations and vigils this month, funded by some donors.
Ã¢â‚¬Å“Let us, as the DPP, find a solution to foil these plans. Their cause is aimed not for fuel or forex, but to cause chaos in the name of peaceful demos. Mudziwe chochita [find ways to deal with the issue]. If donors are going to criticise that, this is democracy; to hell with you. I have had enough. If any donor wants to withdraw from this country, let them leave and go.Ã¢â‚¬Â
Reacting to this, a top diplomat said: Ã¢â‚¬Å“Malawi currently needs about $500 million to be bailed out from the economic problems it is facing, but with such remarks, I see our readiness to bail out the country diminishing and the country is slowly sliding into another Greece scenario where it will not be able to pay its creditors in the coming months.Ã¢â‚¬Â
Another envoy said: Ã¢â‚¬Å“Such comments by the President are not helping matters, but worsening the situation and this will have a terrible impact in the next six months and Malawi will have no way out.Ã¢â‚¬Â
But despite these remarks, the diplomat said: Ã¢â‚¬Å“Our commitment to Malawi will still remain the same because the relationship is between governments and not individuals.Ã¢â‚¬Â
Malawi has been hit by a budget support aid freezeÃ¢â‚¬â€which accounts for 40 percent of the financial planÃ¢â‚¬â€since last year as some donors have withheld funds due to concerns about autocracy and bad economic governance under Mutharika.
The freeze has led to life becoming unbearable for most Malawians due to crippling shortages of forex, fuel and medicines, among others.
Finance and Development Planning Minister Dr Ken Lipenga last month told Parliament the country is facing a $121 million budget shortfall in the current financial year due, in part, to a suspension of an International Monetary Fund aid programme.
Despite the budget support freeze, Western donors have collectively have continued to support Malawi. Lipenga informed Parliament that the British Department for International Development (DfID) has committed to providing Ã‚Â£35 million, half of it to the Farm Input Subsidy Programme for the next five years. The Irish have trebled their support from 1.2 million to 3.5 million Euros.
The World Bank also committed over $250 million for the implementation of the national water development programme, the energy and mining sector, just to mention a few.
Western donors have also helped to procure essential primary health-care drugs worth $30 million for the next 18 months to address the drug shortages.
Ã¢â‚¬Å“We are here because of our commitments to the people of Malawi and nothing else…Such remarks [by the President] will only drive investors away from the country and the chances of getting the IMF programme and budget support are being diminished each time he makes such statements,Ã¢â‚¬Â said another senior diplomat
Another one warned that this is not the time for the President to fight the IMF and its cooperating partners, but rather the Ã¢â‚¬Å“time to devalue the kwacha before itÃ¢â‚¬â„¢s too late.Ã¢â‚¬Â
Another envoy warned: Ã¢â‚¬Å“We are here to help and not finance anarchy as itÃ¢â‚¬â„¢s being put. Time is running out for this country to devalue the kwacha or it will be almost impossible to get out of this mess in the coming months.Ã¢â‚¬Â
The President has publicly refused to devalue the Kwacha as demanded by the IMF as one of the conditions to get the aid programme back on track.
- This is not the first time President Bingu wa Mutharika has spoken strongly against the donor community.
- Last year, he deported British High Commissioner Fergus Cochrane-Dyet for saying, in a leaked diplomatic cable, Mutharika is increasingly becoming autocratic.
Ã‚Â·Ã‚Â Ã‚Â Ã‚Â Ã‚Â Ã‚Â Ã‚Â Following a subsequent Western aid freeze, Malawi has seen increasing forex scarcity, continued fuel shortages and downsizing of the economy, leading to, among others, hardship among ordinary people.