Hon. Folks, while focus is trained on the Saulos Chilima-led public service reforms, it’s important that government simultaneously lubricates other rusty cogs that equally hamper economic growth and improved living standards.
One area that requires change is the wrong economic development model that has been pursued in the past 21 years of multiparty democracy.
In a nutshell, it’s a model built around the principle of wealth distribution from the rich to the poor as a tool of narrowing the gap between the two groups.
Governments worldwide create strategies, including tax, for the distribution of wealth to the sectors of the community that are less privileged. In Malawi, this is best illustrated by the Pay As You Earn (Paye) personal income tax which is targeted at those in employment and earning more than K20 000 a month.
Government, through the Malawi Revenue Authority (MRA), exacts up to 30 percent of the incomes from this group, and this constitutes about half of the domestic revenue collected in the name of income tax.
Coincidentally, those earning K20 000 or less—and these form a significant group of the urban poor and almost the entire rural population which constitutes 85 percent of the estimated 16 million Malawians—happen to be those that almost entirely depend on public goods and services that government provides.
Their children would more likely go for free education in public schools while those in the higher echelons of Paye have the alternative of sending their children to the much more expensive private schools.
Those earning K20 000 or less are also more likely to depend of free health care delivered by the public health system whereas those suffering 30 percent deductions on their incomes have the alternative of going to the much more expensive private hospitals.
But government does a lot more than this in the name of distribution of wealth from the ‘haves’ to the ‘have-nots’. There is the Farm Input Subsidy Programme (Fisp) which until this year enabled 1.5 million “have-nots” to purchase 50kg bag of fertiliser (for first dressing), another 50kg bag of fertiliser (for second dressing) plus seeds for maize and legumes—altogether with a commercial value of about K30 000—for only K1 000!
The APM administration also dishes out cement and iron-sheets to targeted rural population with money collected from the taxpayer. All this is probably normal.
What is not normal in my view is the ratio of the population from whom government collects tax versus the population on whom government spends the tax revenue.
Politics of defining who’s employed aside, there’s no denying that much of what falls in the category of personal income tax is exacted from less than one million Malawians (those earning more than K20 000 a month in the public sector, companies and NGOs).
It can also be reasonably assumed that these constitutes the bulk of the domestic market from whom government also exacts the 16.5 percent value added tax (VAT).
If the assumptions above make sense, then the issue to manage here is how to empower the rural majority to fend for themselves and contribute to the generation of wealth which yields taxes that government depends on.
A national development model in which income taxes from say, a million people—a significant number of whom earn between K50 000 and K200 000 a month—are expected to provide public goods and services for a total population of 16 million and growing at the rate of about three percent, is doomed to fail, even if public sector reforms were to achieve a 100 percent pass rate.
Unfortunately, this is exactly what Bakili Muluzi (1994-2004), Bingu wa Mutharika (2004-2014), Joyce Banda (2012-2014) and now Peter Mutharika have pursued in vain. They have nurtured a dependency culture, especially in the rural where 85 percent of the votes come from.
Contrast this with the style of Kamuzu Banda. He encouraged hard work, self-help and the pursuit of excellence. People were encouraged to work hard in their gardens and follow modern methods of farming. At an opportune time, he would embark on crop inspection tours across the country which often ended up in a presidential declaration, dismissing hunger and dire poverty.
The gifts he got from the people may have been obtained by extortion in the collection chain, but they were an antithesis of today’s handout culture which makes people wrongly believe those in government are rich enough to feed them, clothe them and even house them. No wonder in desperation, some leaders reportedly devise ways and means of raining money through Cashgate.
DPP promised to encourage people to grow pigeon peas and other crops which are in high demand overseas. We know Zimbabwe needs our rice and India needs pigeon peas and other crops. How about China? Why not encourage the rural majority to grow crops for export?
That way, they will help bring in forex, their incomes will reach the taxable threshold and above all, they will build their own houses and make their own money. Who said democracy means the president and cronies playing god?
Is SA’s Democratic Alliance serious about tackling racism?
South African opposition Democratic Alliance (DA) politician Dianne Kohler Barnard has been demoted after sharing a Facebook post which praised apartheid President PW Botha.
She has lost her job as shadow police minister and is now the shadow deputy minister for public works.
But is this demotion enough to limit the damage to the DA’s reputation?
The DA has long been seen by many South Africans as a party mainly for white people, and this was the moment for its first black leader Mmusi Mamiane to be assertive.
Some saw his election in May as window-dressing for a party that is nostalgic about the apartheid era, and he has been under pressure to dispel this perception
Maimane’s rise to the top job in the DA was precisely because he is black, and his main objective is to grow support for the party among the black electorate.
Kohler Barnard’s post could have far-reaching political ramifications.
This could not have come at a worse time for the party, as important local elections, in which the DA hopes to mount a serious challenge to the governing ANC, are just months away.
The shared post which started all the trouble criticised the police and then called for the return of President Botha.
Addressing the deceased apartheid leader it read: “You were far more honest than any of these ANC rogues, and you provided far better services to the public.”
Kohler Barnard said she shared the post because of the criticism of the country’s corruption-busting police unit in the first sentence, and she did not see the part about Mr Botha.
She has apologised and the post has been removed, and Mr Maimane said it was “indefensible”. He later demoted her, but he may need to do more to placate opinion.
Political commentator Justice Malala has written that he should send a message that “racism, and associations with it, will not happen on his watch”.
He continues “if Maimane does not do this, he can give wonderful speeches and they will mean nothing”.
Many political parties reacted unfavourably to the reshuffle, including the ANC. It said it cannot be fooled by the DA leader’s action and it shows it has not shaken off its reputation.
The ANC’s Zizi Kodwa said “[if] this was not a party of the past, they would have taken a serious decision, including removing [Ms Kohler Barnard] from parliament”.
He told me that this incident reveals that the DA is a racist party which has members who “cannot hide their feelings for PW Botha who caused so much misery. They’re praying for him to rise from the grave.”
He went on to say that the “DNA of the DA is racist” and that the election of Mr Maimane is just a cover for this.
Those are the words of a politician, but even those who stand back from the fray think that this incident has revealed a bigger problem.
History of incidents
Mcebisi Ndletyana, a senior researcher at the think tank Mapungubwe Institute for Strategic Reflection, said “it is no longer enough for the party to claim it is non-racial”.
“By electing Mr Maimane, the party had unsettled the ANC’s position that the DA is a racist organisation. But now it will have to start all over again to persuade people who already have doubts, as the doubts are backed by evidence.”
Ndletyana reminded me of an incident two months ago in the Nelson Mandela Bay Municipality. There, a DA councillor referred to another councillor, who happened to be black, as a “bobbejaan”, Afrikaans for baboon.
Last year, soon after the general election, there was national outrage when DA deputy chief whip Mike Waters tweeted a picture which portrayed ANC voters as dogs. He, too, has since apologised.
And in May this year, at the party’s national conference where Mr Maimane was elected, there was a collective cringe when veteran journalist Allister Sparks, expressed his admiration for Hendrik Verwoerd, the architect of apartheid.
He too apologised.
It is clear from the colossal reaction following Ms Kohler Barnard’s post that the wounds of apartheid are still raw for millions of South Africans even in a non-racial constitutional democracy.
It is therefore imperative for those who seek to continue with Nelson Mandela’s reconciliation project, including Mr Maimane, to be very clear where they stand with racism.
There is no middle ground.—BBC