Malawi’s economic plan needs achievable targets

Malawi’s Economic Recovery Plan (ERP) must be supported by the entire civil service with targets that are measurable, achievable and realistic to ensure its success, some participants to a public dialogue on the blueprint said on Friday.

“The ERP has to be measurable, achievable and realistic and put timeframe to it. There is also need for a feedback mechanism so that people are aware of what is achieved,” said Nyirenda.

“Any plan is subject to change due to economic variables prevailing at a particular time,” said Chikavu Nyirenda, chief executive officer at the Blantyre-based Alliance Capital Limited.

Participants also said the plan, with an 18-month lifespan, may be meaningless if the burden of reforms are not shared by the presidency— accused of frequent foreign and domestic travelling— when the majority of Malawians are feeling the pinch.

The reforms, on the monetary side, include the devaluing of the kwacha by nearly 50 percent and subsequently liberalising the exchange rate which has resulted in rising inflation, increasing the bank rate now at 21 percent, effectively pushing the banks to up their base lending rates now at 32 percent.

On the fiscal side, government took steps to increase fuel and electricity tariffs and returned to an automatic pricing mechanism (APM) on fuel to reflect full cost recovery. The APM has seen prices of fuel rising almost every month since June in line with the global oil price and exchange rate movements.

The dialogue meeting will be in series, according to Minister of Information Moses Kunkuyu, to allow for wider public participation.

While commending government for the meeting, Nyirenda, called for the formation of council comprising the private sector, government and the academia, among others, to spearhead the implementation of the ERP.

Malawi Watch executive director Billy Banda bemoaned the poor representation of opposition political parties at the meeting, arguing that the bloc is critical in the implementation of any government plan.

Notable politicians from the opposition included Gwanda Chakuamba, president of New Republican Party (NRP) and Kamlepo Kalua, leader of Malawi Democratic Party (MDP) who  have publicly announced their support to President Joyce Banda’s People’s Party (PP).

There was no representation from the main opposition parties such as Malawi Congress Party (MCP) and United Democratic Front (UDF).  A notable representative from Democratic Progressive Party (DPP) was MP for Nsanje Central, Francis Kasaila.

In his contribution, Chakuamba questioned the frequent travels of government officials when the same government is preaching austerity measures.

He asked for a review of the much-touted Public Works Programme (PWP)—an initiative in which rural Malawians receive K300 per day for various works—to gauge its effectiveness since it started in the MCP era.

Socio-economic commentator Mavuto Bamusi was worried with the consultative nature of ERP compared with other strategies such as Poverty Reduction Strategy, Malawi Growth and Development Strategy (MGDS) and Malawi Economic Growth Strategy which were borne out of wider consultation.

He said government has to come out clearly on the funding for the plan, arguing that if the plan is relying on the K406 billion budget allocation, that will not work because value of the money is reduced owing to the recent devaluation of the local unit.

Bamusi outlined three preconditions for the success of the plan; that the civil service has to be united, consistent donor support and popular will of all Malawians.

Deputy Minister of Economic Planning and Development Khwauli Msiska said ERP is not a departure from the main framework of MGDS, stressing that “successful implementation lies within the realm of the civil service”.

“This government will always be open. We want to make sure that Malawi moves forward and we don’t expect finger-pointing,” he said, adding that the ERP will be subjected to quarterly reviews.

The government officials did not come out clearly on the financing of the plan.