Donor dependency slowly ending—APM
President Peter Mutharika has said Malawi may soon confidently wean itself from donor dependency by doggedly pursuing recent tough economic measures which have protected resources and paved the way for quality national programmes.
Giving his State-of-the-Nation address and opening the 2016/17 Budget Session in the National Assembly in Lilongwe yesterday, Mutharika expressed happiness that the fiscal discipline his government had introduced has led to a stabilisation of the economy.
Until over three years ago, Malawi had been relying heavily on donors, who used to provide 40 percent of the budget support. But in the wake of a K24 billion Cashgate scandal, whereby some politicians and civil servants looted public resources through fraud and corrupt practices, the donors stopped the direct aid to the government.
The donors, instead, have since been aiding poor Malawians directly through reputable non-governmental organisations (NGOs). The donors have also been facilitating and closely monitoring the tough economic measures and public sector reforms being undertaken by the government, dangling the hope of the aid resumption -at least in other forms.
“I am pleased to report that the economy is slowly stabilising. We took tough measures to contain our situation, and it was not easy,” the President said in his one-and-a-half hour address titled Towards Recovery and Sustainable Socio-economic Development.
Mutharika announced that in order to enhance domestic resource mobilisation, the government will implement a broad-based tax reform this 2016/17 fiscal year in order to align the tax regime with national development goals, thereby making the systems more efficient and transparent.
He told the House that the economy is expected to register a Growth Domestic Product (GDP) growth rate of 5.1 percent in 2016 and onward to seven percent in 2017, adding that the annual inflation rate is expected to fall from 21 percent in 2015 to 19.8 percent in 2016.
Mutharika has since called for unity and perseverance among Malawi, especially as externally-induced pressures and shocks will continue to buffet the country, promising that his government will do its best to steady the ship in such turbulent environments.
He saluted donors for faithfully assisting the nation in the face of growing socio-economic challenges.
“Let us continue working together in the furtherance of our national interests. After all, we belong to different branches of the same government. History has placed, on our shoulders, an important responsibility of changing the circumstances of our people together.
“History will harshly judge us if we fail to seize this God-given opportunity to bring about the much needed change,” he concluded. n
