An economist has faulted Malawi’s development planning process, which has been foiled by change of governments and lack of clear agenda and priorities.
University of Malawi’s Chancellor College associate professor of economics Winford Masanjala told Business Review last week that despite implementing successive development plans since 1962, there is nothing to show for them as the country is still one of the poorest in the world with a gross domestic product (GDP) per capita of about $226.5 (about K165 345).
He said: “We have been talking of national development planning from 1962, but why is it that we remain the poorest country in the world? Our development policies made an argument to grow [the economy] at the rate of six percent annually, but if we look at the performance, we find that we have not been able to achieve that and now we are talking of 2.6 percent GDP growth for 2016.”
Masanjala gave an example of the just ended Malawi Growth and Development Strategy (MGDS II), saying Malawi has only managed to succeed in political stability while it has completely failing to accelerate economic growth for poverty reduction, conducive macro-economic environment, increased diversification and value addition of exports, effective foreign aid management and control of domestic debt.
Since 1962, Malawi has had 11 development plans whose main goal was to grow the economy at an average of six percent and these plans include Nyasaland Development Plan (1962-65), Malawi Development Plan (1965-1969), Statement of Development Policies (Devpol I, 1971-1980), Devpol II (1987-1996), Poverty Alleviation Programme/Policy Framework Papers (1995-2000), Vision 2020 (1998-2020), Malawi Poverty Reduction Strategy Paper (2002-2005), Malawi Economic Growth Strategy (2006-2011), Economic Recovery Plan (2012-2014) and MGDS II.
Giving a breakdown, Masanjala said under MGDS II, actual growth has been volatile and below target.
For instance in 2011, economic growth was projected at 6.9 percent while the actual growth was 4.3 percent, in 2012, the target was set at 7.1 percent but the actual growth was at a paltry 1.9 percent.
In 2013, growth was projected at 7.4 percent while in reality, the economy expanded by 5.2 percent, in 2014, the envisaged growth was at 7.3 percent, but the economy grew at 5.7 percent while in 2015, growth was projected at 7.4 percent but only managed three percent.
Under MGDS II, the fiscal balance was targeted to grow positively from 0.2 percent to 2.2 percent of GDP by 2015. In real terms, it deteriorated to negative 5.3 percent by 2014 while budget deficit widened in absolute and relative terms and grants fell to under five percent of GDP.
In a separate interview, World Bank senior country economist responsible for macroeconomics and fiscal management global practice Richard Record said despite having powerful development strategies, lack of implementation has hindered Malawi’s development and growth.
“Malawi needs to maintain consistency in its policies if the national development plans are to be fully implemented and yield positive results. Otherwise, we will continue seeing more development plans being developed without bearing fruits,” he said.
Ministry of Economic Planning and Development acting chief director Peter Simbani said government is consulting key stakeholders to solicit views on the development priorities for the medium-term National Development Strategy to succeed MGDS II. n