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IMF says Malawi in crisis, economic outlook uncertain

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Tsikata: Malawi is in a crisis
Tsikata: Malawi is in a crisis

The International Monetary Fund (IMF) today said Malawi is in ‘a crisis situation’ and called on authorities to ensure ‘drastic actions’ aimed at normalizing relations between the country and its development partners.

IMF has also condemned recent revelations of misappropriating substantial amounts of public funds at Capital Hill, saying the situation has triggered anger among Malawians as well as uncertainty to Malawi’s economic outlook.

“This is a crisis situation and needs drastic actions. I am talking of the crisis because the fiscal situation was designed on the inflows of substantial amount of external support and that is at risk because of what you are probably calling it cash-gate,” said IMF Mission Chief Tsidi Tsikata at a news conference in Lilongwe marking the end of a two-week mission by IMF.

A team from Washington-based IMF, led by Tsikata, was in Lilongwe between November 5 to 20, 2013, to conduct discussions for the third and forth reviews under the Extended Credit Facility (ECF) program.

Added Tsikata: ” In our interaction with Malawians, we also felt a lot of anger and frustrations [among Malawians] and I think the combination of anger among Malawians themselves speaks the challenge that the government faces and the government needs to be taking measures to address the concerns of Malawians .”

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10 Comments

  1. I utterly condemn the abhorrent cash-gate scandal in Malawi. The govt must et up a commission of inquiry on this so that it can never be repeated in future. In addition implement prompt and penetrative investigative programmes to go wherever the facts lead.

    At the same time I have to question the moral justification on the part of the donors (IMF, Dfid, EU etc) of using “AID as punitive weapon”. Where is the ethical and moral justice in that? It is time we brought this question to the forefront in the international relations forums at the UN. How many people must die due to lack of medicine or hunger while you sit there pontificating about political squablings? How many children must die before you donors release the help they need? It is time to address this question of AID head on at the UN. A few criminals have committed a crime, yes but is that cause enough to condemn and punish all the unborn Malawian babies, under fives, old and young?
    If AID is going to be continually used as punitive weapon then it is time to abandon the concept of AID all together at the UN! Frankly, it is a rope of sand; encouraging the Malawi govt to rely on it for medical supplies when in reality the rug can be pulled away under their feet at any time. I would rather the govt borrow the 40% budget deficit than rely on a rope of sand of foreign AID!
    Why has the IMF review not outlined say 3 conditions that must be met for AID to resume as soon as possible? Who knows what the Norwegians moral campus is in these matters but no one can doubt the British moral duty of care and its deep roots in saving lives. I am genuinely surprised at Britain joining in the use of “AID as a punitive weapon” for political blunders in Malawi. We all saw how devastated the economy and the health system were under the previous AID embargo. Is it morally acceptable for AID to be used as a weapon?

  2. Thomas Ngoma, you do realize that they do not owe us the aid, right??? Stop with the entitlement attitude. It’s their money and they can do as they please with it. We need to learn to be accountable and responsible.

  3. I think Ngoma is writing from a position of ignorance. What has been stopped is budgetary support. Humanitarian aid though non-government channels has never been stopped in Malawi, even during the many donor support freeze of the past regimes.

    I also agree that we have become so much beggars that we are now insisting on being helped, while we Squander own resources. Such attitudes will not develop this country. Maybe, Mr. Ngoma should come home and help protect our resources from looters.

  4. Which authorities should take drastic actions? The same thieves? The same Joyce Banda the mother of all thieves in PP? Let’s take the CSO route and remove this hazardous woman. Eliminate one to save millions.

  5. The Watergate scandal was a political scandal that occurred in the United States in the 1970s as a result of the June 17, 1972 break-in at the Democratic National Committee headquarters at the Watergate office complex in Washington, D.C., and the Nixon administration’s attempted cover-up of its involvement. The scandal eventually led to the resignation of Richard Nixon, the President of the United States, on August 9, 1974—the only resignation of a U.S. president to date. The scandal also resulted in the indictment, trial, conviction, and incarceration of 43 people, dozens of whom were Nixon’s top administration officials.

    Can Joyce Banda resign as well? Nkhuyu zodya Joyce Banda zisapote ife kuno ayo. CSO more fire on this woman thief.

  6. Gotta find a solution to this pollution(4x)
    The poor man a feel it(4x)
    Gas gone up
    Bus fare gone up
    The rent gone up
    For meal gone up?
    Lighting gone up
    The tax gone up
    Car parts gone up
    And mi can’t take the first law
    CHORUS
    Time gone up
    Scallion gone up
    Onion gone up
    Red beans gone up
    Black pepper gone up
    Chicken gone up
    And the parents them angry
    Cause the pickney them hungry

  7. Guys be careful before passing judgement on others. The debate I am referring to here is the UN mandated official development assistance (ODA) that at 0.7% target serves as a reference for 2005 political commitments to increase ODA from the EU, the G8 at Gleneagles Summit and the UN World Summit. In 1970, The 0.7% ODA/GNI target was first agreed and has been repeatedly re-endorsed at the highest level at international aid and development conferences. For example, in 2005, the 15 countries that were members of the European Union by 2004 agreed to reach the target by 2015. In 1969, the Pearson Commission – in its report “Partners in Development” – proposed a target of 0.7% of donor GNP to be reached by 1975.
    This is the level of formality I am referring to. The international donors have applied aid embargo on Malawi during Kamuzu years, Muluzi years, Bingu years and now Mrs Banda year each time with devastating effect on poor people, children and the vulnerable. Drugs running out in hospitals with thousands dying in the course. The devaluation of the kwacha that trebles the prices of life saving goods in the country. AID is at the heart of the UN Charter. My question stands “ is this what the basic premise of giving aid was intended for?” What is the moral justification for using AID as a punitive weapon for political disagreements? Is it time we revisited the parameters of the AID charter at the UN? Is it promoting corruption? If it is vitally important and engrained in the international body psyche then is there some aid type that must be ring fenced against these regular embargos? My question to the international community is, what is the moral justification for using aid as a punishment for political malfunctioning of a nation?

  8. Thomas Ngoma, you are childish. May be you are one of the people who used to say “vinthu vili makora” and yet Joyce Banda’s administration has been messing our economy. How on earth do you think the very involved cash-gate looters can form a sound commission of inquiry? Are you not reading in-between lines that Joyce Banda is busy defending herself and top government and PP officials? You think Joyce is innocent in the infamous cash-gate scandal? The fact that you are in London does not make you wiser than we Malawians who are in Malawi and are seeing things from the practical point of view. My advice to you is just shut-up your mouth because you do not know how frustrated we are here at home. What judging of others are talking about while facts a bare for everyone to see? If you are a supporter of JB and PP just keep advising your leader that the writing on the wall is a clear indication that Malawians are no longer trusting her. The patience of the nation is waning so fast that more strikes are eminent which should see this government ousted.

  9. Ngoma, are you really serious with your unjustifying the donors for their withdrawing aid from the PP and JB looting administration? No matter how long your list of organizations may be in trying to justify your accusation, but the truth is that no one can support a brother who he supports with funds for the better of the supported brother’s family welfare and yet that brother uses the support wrongly. Never should you sound an angel and yet you may be doing to your own relative the same thing the donors are doing to this ruthless JB and PP administration because of misappropriation of the Malawian finances by self-enriching themselves.

  10. Mnkhoma, you miss my point completely. You are completely engulfed by this cashgate which I can understand. If you are angry about this I can tell you I am even more angry at this senseless act. I am a tax player whose tax these criminals have recklessly squandered.
    I want us to pull back and consider the bigger picture. Every time AID is withdrawn, who really suffers? It is never the fat cats… it is your granny in the villages, it is the under five children who can no longer have access to medicine, it is the old and the meek and never the fat cats. We give AID to you Nkhoma to compensate for the things you should have done yourself but that AID is given in the name of moral justice, humanly love and sense of duty to one another as human beings. That is why nations (and the UK was at th forefront of that) set up AID in particular, to protect the most vulnerable in poor countries around the world. However, whenever there are political malfunctioning that AID is withdrawn. In Malawi you have had that history during Dr Banda time, Dr Muluzi time, Dr Bingu time and now Dr Banda time. The same has happened to other countries. So my question is really not to you Nkhoma (not sure why you are even responding to it…lol) it is to the international community to consider why AID is used to punish malfunctioning politicians when the impact is not going to hit the fat cats but the most vulnerable we set out to save in the first place. That is the question that is bothering me. Is there another way to circumvent this while achieving the same goals?
    As for what is going on in Malawi at this stage feel free to arrest anyone implicated you please. Do what you like it. I am surprised to hear that if a commission of inquiry is set up it will be manned by PP. I would have thought the right people would be drawn from opposition/independents/judiciary otherwise they are judge, jury and executioner which is not right.
    Against that background, what is the moral justification for AID to be used as punishment for political malfunctioning when we effectively are hitting the most vulnerable?

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