Govt, improve public service to protect the poor

Honourable folks, the International Monetary Fund (IMF) on Thursday cautioned that the economic fallout from the coronavirus (covid-19) pandemic could undermine emerging and developing countries’ capacity to achieve the sustainable development goals (SDGs).

IMF deputy managing director Tao Zhang told delegates at the UN Conference on Financing SDG Implementation that the Covid-19 pandemic has put a strain on governments’ spending needs, a development which the economists at the Bretton Woods institution say will limit member countries from meeting their SDG targets.

An IMF Study showed that low-income developing countries would need to increase their spending to SDGs by 15 percentage points of their GDP to ensure discernible improvements in education, health care and public service delivery.

But alas! The economic fallout from the pandemic has forced governments to redirect their spending towards initiatives to contain the spread of the virus or keep their ailing national economies afloat.

Earlier in the week, the Sadc made a similar observation in its monthly report for April that Covid-19 has created uncertainty in the business landscape, which could create losses, increase fiscal deficits and public debt load this year.

Folks, the coronavirus pandemic has proven to be a tricky problem to handle for world leaders. Governments have to decide whether to do business as usual and risk uncontrollable contagions or to impose lockdown restrictions and cripple their national economies.

For a low-income country like Malawi, where 80 percent of the live below the poverty line and with rampant inequalities between the rich and the poor, an economic recession could be catastrophic. It could push the poor into absolute destitution.

As it stands now, our economy has stalled, with some players in the manufacturing industry working below optimal capacity, schools completely closed down and the tourism and hospitality industry crippled by the restrictions government implemented to stop the spread of coronavirus.

Folks, losses of business will inevitably mean less revenue flowing into account number one through taxes collected by the Malawi Revenue Authority. For a cash strapped government like Malawi, that inevitably results in a lack of fiscal space to manoeuver out of this crisis.

It is extremely sad that this is happening at a time when people need government interventions the most.

The crisis has exposed underlying structural shortcomings, particularly in terms of providing social safety nets to protect people at higher risk of poverty, in worse cases, utter destitution and uneven access to quality public services between the rich and poor.

Folks, it is as if Zhang and his legion of economic advisers in Washington were writing specifically for Malawi. To date, government is still running around in circles as it tries to find measures of revitalising the economy and protects its vulnerable and poor citizens.

When the pandemic broke, government had not yet identified people who would need support in the event of a lockdown.

But today, government has much more to worry about than the poor living in peri-urban areas as Covid-19 cases continue to rise, and consequently undermining chances of reopening the sections of the economy that have been affected by government restrictions.

Government now has to contend with the teachers, waiters, chefs, and support staff working in private institutions in the education and tourism and leisure sectors who are facing pay cuts in this crisis.

It’s not just about the poor vendor in Ndirande market anymore. Even the buyers are caught up in the quagmire now.

And Capitol Hill has no measures to protect them in the event that they lose their jobs as companies lay-off staff or close shop in the increasingly hostile business environment caused by Covid-19. And the situation is likely to get worse.

Folks, it is absolutely crucial that government ensures prudent use of its finances and redirects them to priority areas like health and education.

It is imperative that government agencies such as the Office of the Director of Public Procurement and the National Audit Office act with vigilance to ensure that government funds are not used to pay for overpriced goods, some of which are not even delivered.

Government will need every penny it can get to ensure that the increasing number of poor and vulnerable segments in our economy are afforded standard public service delivery.

As more and more people are forced from medical care and private schooling, they will flock to the public education and health care systems. The least government can do is to ensure that when they get there, they are afforded with the quality service they deserve.