Road to transformation?

In her State of the Nation Address, Malawi President Joyce Banda underlined that Malawi is on the road to transformation because her government has laid a solid foundation for hope, prosperity and growth. But what is this foundation and how solid is it to be believed? EPHRAIM NYONDO writes.

Her first State of the Nation Address last year was not just a pack of words and more words, about policy. It was one colourful 14 787-worded speech written with a touch of poetry and well punctuated by uplifting phrases as those found in Dr Martin Luther King’s ‘I Have a Dream’.

It was not like the one President Joyce Banda delivered in Parliament last week. This one was a mechanical, 12 497-worded speech which began with policy, and talked policy throughout.

The change in style this time around could, to a great extent, unravels Banda’s careful abreast of the changing political landscape in the country since the death of Bingu wa Mutharika.

She took office, as she puts it, when ‘the economy was on the verge of collapse’. Even when she took the International Monetary Fund’s (IMF) devaluation dosage to resuscitate it, she knew she was leading a nation with a ‘spirit of despair’.

Confident of her decisive actions, Banda told the nation: “I believe that we have laid a solid foundation for hope, prosperity and growth”.

Economic recovery

The foundation she referred to are the political and economic U-turns she undertook—a 180 degrees Celsius turn from what defined Mutharika’s leadership. Generally, they all bordered on renewing Malawi’s relationship with donor countries, with devaluing and floating the local currency as central.

“As a result of decisive action by my government to institute reforms that would recover the economy, we have started to experience the first signs of the recovery. Mr. Speaker, Sir, I am pleased that even though prevailing circumstances forced us to make some difficult decisions, they were the right decisions. Mr. Speaker, Sir, I am very thankful that Malawians have stood with me and continue to do so as we start to see the fruits of our reforms,” she said.

Of course, as the kwacha appreciates on the market and fuel prices go down with a small margin, one would hardly fault the President for saying ‘we have started to experience the first signs of the recovery’.

However, deeper questions remain: When the President says ‘we have laid a solid foundation for hope, prosperity and growth’, does it mean that the foundation of the country’s economy is built on the donors’ mercy?

When have donors—whose behaviour, history rightly shows, is always unpredictable—become a foundation of an economy?

Certain that Malawi is on the ‘Road to Transformation’, as she themed her speech, how ‘solid’, then, are these foundations to contain and support the road which the country is using on its journey to transformation?

The entire spectacle raises deeper questions regarding how Banda’s administration views the country’s economy and, again, how they intend to lead the nation to progress.

As argued by Kondwani Chikhaza, a political researcher with Institute for Policy Research (IPR), although Banda came at a difficult time, her administration has made positive strides in terms of addressing key governance concerns and the state of political and civil liberties which were under constant threat.

Transformative governance

However, Chikhaza adds that transformative governance at the policy level should be more focused on changing fundamental factors that shape political and economic outcomes.

“On the contrary, a critical look at the “bold” decisions she has taken so far would suggest that they are more proximate meriting a good project officer than fundamental ones commensurate with her position,” he says.

Adds Chikhaza: “On the political front, one would be tempted to hail her good working relationship with her Vice-President, unlike the case in the past. However, institutional arrangements that induce vulnerability of the vice-presidency remain rock solid.”

Chakhaza feels the harmony is merely borne out of goodwill and not a reflection of any fundamental transformative changes.

On the economic front, Finance Minister Ken Lipenga believes that appreciating of the local currency and reduction of fuel prices are a sign that the economic recovery is on track.

But economic analysts are cautious.

Economics professor at Chancellor College Ben Kaluwa noted in a recent interview that the real strength of the currency will be observed when the tobacco sales season is over, and the country start buying imports for the next agricultural season.

“The sustainability of the exchange rate stability will be critical when agricultural imports are being procured. The recent appreciation is not enough to gauge the strength of the kwacha,” he said.

Immediate needs of the people

On his part, Chikhaza argues that whether the manner in which she has devalued the currency, i.e. along with floatation, is indeed prudent enough to start bragging about transformation remains a contestable topic attracting more pessimism than hope.

“Wouldn’t it be more fundamental if she championed policy changes to free our monetary policy making powers from the bondages of politicians (obsessed with meeting short-term political gains) to a semi-independent Reserve Bank of Malawi that has the technical aptitude to negotiate with the donor community on such technical nitty-gritties as devaluation of the currency?” he wonders.

He adds that instead of focusing on building the capacity of the State machinery to tackle market failures along agricultural value chains, she has committed a lot of resources attending to immediate needs of the people that are in their own right a reflection of both policy and market failures.

Not only that. Malawi is still a tobacco economy leaning heavily on donor. In fact, Malawi today is more dependent on donors than it was four years ago. This, experts warn, is not a catalyst of transformation of a nation.

As argued by Chancellor College economics professor Ephraim Chirwa, Malawi’s greatest challenge continues to be its failure to generate sufficient local revenue.

“This is an area we need serious debate on. How do we generate enough revenue? It should not just be a question of those in leadership. Every Malawian needs to sit down and think about ways of helping towards this cause,” he says.

So, has Banda’s presidency really managed to lay a solid foundation for hope, prosperity and future growth?

Chikhaza says while it should be acknowledged that she came at a difficult time and has been under constant pressure to make an impact in the short period of time, her presidency has so far been a missed opportunity in terms of starting processes of dealing with fundamental institutional arrangements that have retarded economic development while providing a fertile ground for the politics of mediocrity.