IMF team here, Cashgate haunts Goodall
With the International Monetary Fund (IMF) Mission in for crucial discussions with government, Minister of Finance, Economic Planning and Development Goodall Gondwe has expressed fears that serious concerns of over-borrowing might have derailed Malawi’s programme with the fund.
However, an economist has warned that the country might now be bearing the impact on the fiscal front of Cashgate, the plunder of public resources that saw K13 billion siphoned off government coffers during the administration of People’s Party (PP).
The IMF team is in the country on a 10-day mission, holding talks with various Treasury and Reserve Bank of Malawi (RBM) officials, among others.
Speaking in an interview yesterday, Gondwe was non-committal on whether the Extended Credit Facility (ECF), Malawi’s programme with the IMF, was on track.
He said he was worried by the impact of over-borrowing by the former regime of president Joyce Banda.
Two weeks ago, Gondwe told Parliament that the ongoing talks will be crucial for budget formulation despite most donors currently shunning budget support over fears of poor public finance management.
But Gondwe, who said he has been meeting the IMF mission “every day” since its arrival on Sunday, defended the IMF’s role in the budget process as still “crucial” despite the budget—now expected to be presented in September—expected to be mostly financed from local resources.
He said: “That has nothing to do with who is funding the budget. It’s not just here in Malawi; even in England where they don’t get any foreign support, they still work with IMF on the budget process.”
Commenting on Gondwe’s sentiments, Ben Kaluwa, a professor of economics at the University of Malawi’s Chancellor College in Zomba, described the minister’s fears as not surprising saying the country is now bearing the cost of Cashgate.
Said Kaluwa: “It’s not a surprise at all. Over-borrowing revelations and Cashgate imply this was just a tip of the iceberg. The resources had disappeared and the hole had to be filled with over-borrowing to ensure social services such as health, education and others were sustained.”
Donors finance 40 percent of Malawi’s recurrent budget and 80 percent of the development budget; hence, with major donors holding onto their funds, Lilongwe has struggled to formulate a budget—forcing government to recently seek special dispensation from Parliament to spend additional resources while waiting for the presentation of the comprehensive budget in September. Government’s fiscal year starts on July 1.
To My Minister of Finance, I guess Now You understand why Malawians and other donor country expressed concerns and unsatisfactory on the way top Government officials so to say handled the cashgate issue in first place. We have had enough on how the government is handling the issue, We at least have the background of Cashgate, its not only the PP era that plundered on public resources, why should other party be excluded in the act when the fact remains they have a hand in it, why should Malawians be blindfolded with words of trying to amend the broken arm of the government, were you not there just some few days ago when we heard indoor cashgate at Ndata where Millions Dollars were found in state house, The same system which you want to fix it, they are the same people who dug the whole which billions of Kwacha has been siphoned now, which we Malawians are eager to here on What happened and what will be the best step and measures in controlling the interests of few individuals to be the interests of all Malawians who needs Social, Political and Economic developments for this Country, their interest are equally important as to every citizen of this Country Malawi. Why should the poor deprived their right to development, why should they suffer paying tax which is quite higher when you have all sorts of immunity and absolute privileges as government officials, we are sick and tired of so many games that our Government play. Look at the conditions of our Hospitals, Schools, Police stations, Prison, and other infrastructures, the list goes on and on, tell me do you see anything to smile about, the conditions of our communities, job scarcity, high levels of crime, and other challenges, Malawi at Fifty its such a shame but we still rely on Government to do the lest, Learn to serve to the interest of people not persona interest.
God Bless Mother Malawi.
I am sure in your mind you believe you have writen something worthwhile. I am sorry to disapoint you, you have just thrown words all over the place whith no thread whatsoever.
Malawians never learn from past mistakes. We all knew that when it comes to cashgate, both DPP and PP were involved and that the only way to get to the bottom of this issue was to vote for a party that had no hand in cashgate i.e MCP. I am not an MCP member, but I believe that if MCP had won the elections not only would casgate have been investigated thoroughly, but also Malawi would have won the donor’s confidence straight away to start the inflow of foreign aid. But alas! Regionalism politics is embedded in most Malawians to the point that they would rather die with poverty than vote for a political party that does not belong to their tribe as far as they are concerned. So am afraid fellow Malawians, there is more bad news to come for our beloved country. because as long as DPP is in power do not expect any donations from the west, not only becoz of the cashgate scandal but also because of the arrogance of the previous DPP regime of which APM was part of it. You may recall that it was under APM’s watch as minister of foreign affairs that the then British high commissioner was sent packing within 24 hours. Make no mistake fellow Malawians as long as DPP is in power, Britain will never forget that humiliating episode, hence no donations from the Queens country, it’s as simple as that, vote with your heads next time. And you can all see the way people are being fired and appointed in govt today, it is a clear manifestation of how nepotism is embedded in the blood of APM and the entire DPP party. Old habits die hard……..