- Hits Capital Hill for ‘runaway expenditures’
Poverty levels in the country will remain unchanged, at least, for the next 24 years unless the leadership starts appreciating its failures and admits the current mess, prominent business leader Matthews Chikaonda has warned.
His assertion comes in light of the pronouncement by the International Monetary Fund (IMF) that the country’s economic programme is off-track having failed to meet set targets for end-June 2015.
Speaking during a graduation ceremony at Catholic University of Malawi (Cunima) in Nguludi, Chiradzulu on Friday where he was guest of honour, Chikaonda—who is also group chief executive officer of conglomerate Press Corporation Limited (PCL)—observed that Malawi was in a make-or-break situation due to a myriad of problems, among them government’s runaway expenditures.
And commenting on IMF’s announcement that the country’s gross domestic product (GDP) growth for 2015 has fallen from earlier projections of 5.5 percent to three percent, Chikaonda used what he called the Rule of 72 to paint a gloomy picture of the country.
He said: “I want to translate mathematically what that three percent means using a simple mathematic equation. There is something called the Rule of 72 which you use to know how long something will take to double. Take the number 72 divide it by the percentage growth, in this case the three percent said by IMF.
“In other words we will just be maintaining the present poverty for the next 24 years. But since the population growth rate is just about the same it means the [GDP] per capita will remain the same for the next quarter century and that is not acceptable.”
Already, the country is experiencing skyrocketing inflation rate at 22.2 percent, high interest rates in commercial banks hanging between 32 and 37 percent as well as low GDP growth rates. Development practitioners say for a country to meaningfully reduce poverty, it needs to grow by at least six percent annually.
Speaking in an interview later, the former finance minister observed that for the past 51 years of independence, Malawi was used to doing things the wrong way; hence, the need to change the methods and processes of governing the country to fix the current problems.
Chikaonda, a former governor of the Reserve Bank of Malawi (RBM), also attacked government, seemingly at a defining moment, for spending millions of kwachas on political rallies in the name of development rallies when hospitals lack essential drugs and equipment.
He cited oxygen concentrators, which are crucial hospital gadgets and cost about K1.4 million each that are inaccessible in most hospitals.
“Dowa District Hospital needs seven oxygen concentrators, but they have one. On the other side of our expenditure behaviours, a public rally by government costs about K70 million and if you divide by K1.4 million you have 50 oxygen concentrators.
“So, just one public rally is equivalent to 50 oxygen concentrators…meanwhile patients in the hospitals are unable to get treatment because the gadgets are not there. We should have remorse for the way we have managed this nation,” lamented Chikaonda.
Minister of Finance, Economic Planning and Development Goodall Gondwe could not be reached to comment on Chikaonda’s diagnosis.