Contracts that wound the economy

Since the advent of the Peoples Party government we read again and again of someone claiming millions of kwachas compensations or damages from the government because of the latters failure to fulfil its part of a contract.

The first such claimants were public servants whose contracts the new government annulled in order to appoint technocrats of its own, I thought the sums claimed were colossal enough until I read the front page of the Weekend Nation dates Saturday May 11 2013 that “The Commercial Court in Lilongwe has walked out of the mediation between the government of Malawi and Secucom Holdings Limited over the latters K40 billion claims for breach of contract.”

What sort of people sign contracts such as lead to governments budgetary deficits? The signatories like Antonio in Shakespeare’s The Merchant of Venus seems to underrate the risks involved. Hence they bargain with the governments pound of flesh thinking the other party would not take such considerations literally.

For what now appear to have been ill thought out contracts the government is to give away billions of tax payers money in exchange for nothing by way of products or services received.

When the late Dame Margaret Thatcher became Prime Minister of Britain in 1979, the first thing she did was to appoint adhoc advisors from the private sector to make a study of the civil service machinery and suggest ways of cutting costs and improving efficiency. One of such advisors was from the famous chain called Marks and Spencer.

When the British were in Africa administering their colonies from time to time they would appoint commissions of inquiry into certain problems. Often they were aware that something was wrong somewhere in the public service, but did not know its nature or magnitude. A commission comprising experts was intended to clarify the situation and make recommendations.

There is reason to believe that something is wrongly operated in the Malawi civil service. It cannot be that the government does not have legal experts. Certainly there are learned lawyers, some with second and third degrees.

From time to time we read that auditors have ransacked a racket of ghost recipients of government salaries. These are usually found in the large ministries of Agriculture and Education.

During colonial and Kamuzu administrations there were few chartered accountants or officials with equivalent qualifications. Now there are many qualified persons, should the civil service not be operating with greater efficiency than before? Do we not send out some officials to obtain high qualification so that they come back and perform better?

We are told: pay civil servants better if they are to work more efficiently and with higher morale. But when public funds are being spent on breached contracts how much will there be left to increase civil servants emoluments?

The front cover of The Economist dated April 27 to May 3 is headed Generation Jobless, the global rise of youth unemployment. The leaders page discusses problems of the youth who have no jobs, both in developed and under developed countries.

This problem exists in Malawi. We sometimes come across people who have been trained as teachers but who cannot find employment. It takes time for some graduates especially those in humanities to find jobs.

Are we sufficiently cognizant of the effects of unemployment on the youths concerned and on society as a whole.

Causes of youth unemployment world wide are summarized by The Economist thus, youth unemployment is often at its worst in countries with rigid labour markets. Cartelised industries with taxes on hiring, strict rules about firing, high minimum wages, all these help condemn young people to the street corner. South Africa has some of the highest unemployment south of the Sahara in part because it has powerful trade unions and rigid rules about hiring and firing. Many countries in the area of youth unemployment have high minimum wages and heavy taxes on labour. India has around 200 laws on work and pay.

How does this quotation relate to the situation in Malawi? There is talk about commercial farming. The youth should be identified with this, late President Kamuzu Banda magnificently tackled this problem through the young pioneer movement. Read how this was done in History of Malawi Volume 2.