Mutharika sets five-year self-reliance deadline

President Peter Mutharika has set five years as a turning point for Malawi to start balancing its national budget without relying on contributions from donors.

Mutharika announced the ambitious target in an interview he gave to the Foreign Affairs, an American magazine that touts itself to be a choice for most influential global decision makers.

The last edition of the magazine, published this week, quotes Mutharika as having said Malawi is committed to becoming self-sufficient, saying: “Although we are not yet in a position to be totally free from reliance on our financial partners, we are certainly on the right track.

“In five years, we would like to be able to implement the national budget without support from donors. With proper planning, growth and the expansion of our export base, we can achieve self-sufficiency.”

The Malawi leader pointed to the implementation of the National Export Strategy (NES) as one of the tools for realising his dream.

Donors traditionally support 40 percent of Malawi’s budget and 80 percent of the development account.

According to the magazine, Mutharika also wants to push the agenda of “ruthlessly” marketing the country’s investment potential as a strategy for achieving self-reliance.

“There are generally two main interests for investors: the potential market size and the security of their investments; Malawi is strong in both of these areas,” he told the magazine.

He explained in the magazine that Malawi enjoys preferential access to a number of strategic markets at regional and international levels and the country’s reach spans 21 countries in all areas of Africa through the Southern Africa Development Community (Sadc) and the Common Market for Eastern and Southern Africa (Comesa).

He added, according to the magazine, that Malawi also has access to the United States through the African Growth and Opportunity Act and to the European Union countries through the Everything but Arms initiative.

“If you take all this into account together with our bilateral agreements with India, China, Pakistan, Brazil and South Africa, among others, you can see that Malawi has a much wider market reach than perhaps you would at first imagine,” the magazine quotes him.

The President also said Malawi is signatory to the Convention on the Settlement of Investment Disputes, subscribes to the Multilateral Investment Guarantee Agency of the World Bank, and is a member of the Africa Trade Insurance Agency—a World Bank-supported initiative aimed at guaranteeing investment in Africa.

Besides, the President told the magazine, Malawi is signatory to a number of Investment Promotion and Protection Agreements and double taxation agreements.

“We are attractive to investors because of our reputation as a peaceful and politically stable country. Malawi has never gone to war, there is no ethnic conflict to speak of and even the labour unions are peaceful and open to negotiation,” he is quoted as saying.

He also said the  establishment of the Malawi Investment and Trade Centre (Mitc), which has been instituted as a one-stop service centre for investors, now process  applications in five days compared to the previous 60 days.

Chancellor College professor of law, Ben Kaluwa, said Mutharika’s five–year strategy for Malawi to become a financially self-sustaining State on budgetary issues is not impossible if the government takes a serious approach on how it conducts its business with no room for vices such as corruption.

He mentioned countries such as Singapore where the late Lee Kuan Yew transformed  it from a small port city into a wealthy global hub by using such an approach. He also cited Rwanda as another practical example of a hard State reaping fruits of the approach.

Kaluwa also underscored the need for a new approach to budget spending where he cautioned against unnecessary expenditures such as huge spending on fuel allocations. n

With additional reporting by AJUSSA LEONARD, Staff Writer