Hon folks, was Malawi overambitious to target the attainment of middle income status in its Vision 2020?
The vision had quite a few other noble targets meant to ensure that by year 2020 Malawians enjoy a healthier, more enlightened and happier life but all that depended on first and foremost growing the economy significantly, hence the goal of middle income status.
We had 20 years to that and there was recognition that success hinged on Malawi being a God-fearing, law abiding, tolerant and technologically adept nation, a feat requiring effective transformation leadership at the helm. It was reasonable to assume that, if at any point leadership was mediocre, there were at least three other opportunities to change it through the ballot.
So, where did things go wrong?
Economists who love communicating in figures say what we aspired for translates into raising the per capita income from $400 to over $1 000 which could be attained by growing the economy by an average of 9 percent per annum.
Was this do-able? In the past 20 years Paul Kagame has built Rwanda, a country which was war-torn in 1994 when Malawi was enjoying smooth transition to multiparty system of government, so much in the past two decades that, if Rwanda isn’t a middle income economy already then it’s almost there. So, it’s lazy to doubt the do-ability of Vision 2020.
What we should be asking is why a month before the year 2020 we haven’t moved an inch from where we were in 1994 with per capita income stagnating at $400 and economic growth rate at an average of 4 percent per annum.
While it’s proved that growth of national economy does not necessarily translate into improved living standards of the people, it is equally true that poverty is a dehumanising factor and extreme poverty begets nothing but misery.
Malawians living in extreme poverty, constituting 25 percent of the population, survive on handouts—cash transfer, Fisp, food relief, etc. For a government to provide these welfare services over and above its core public service delivery task, it needs to generate more tax and non-tax revenue which depends on the economy generating more wealth.
You don’t have to be an economist to realise that when the economy stagnates, yet the population grows by 35 percent as has been the case in the past 10 years alone, what inevitably ensues is more poverty, more deprivation and, I dare say, political instability. A hungry person is an angry person, they say.
Political scientists believe violent #JaneAnsahMustFall demos which have rocked the country since announcement of the disputed results of the May 21 presidential election are caused or aggravated by resentment of those who rise to positions of power by pledging to improve the lives of voters only to deliver a flop in turn?
In Malawi, Bakili Muluzi (1994-2004) talked about poverty reduction but lacked the political will to walk the talk. Only his cronies had their lives transformed while the majority of Malawians were probably worse off in 2004 than they had been in 1994.
Bingu wa Mutharika (2004-2012) started well by growing the economy by an average of 7 percent in his first five-year term. This was possible by pursuing sound economic management policies (controlling expenditure, ensuring food security and mounting a campaign, albeit verbal, against corruption) coupled with generous inflows of donor aid.
Unfortunately, Bingu became arrogant and ditched the donors in his second term, opting to pursue a zero-deficit budget experiment with disastrous consequences. No forex, no fuel and no drugs and no hope. Then came Joyce Banda (2012-2014) and reversed the mistakes of Bingu by devaluing and floating the kwacha willy-nilly, factors that triggered unprecedented depreciation the currency.
Increased budgetary support of up to 40 percent of the recurrent budget cushioned the impact of the depreciation until second half of 2013 when the aid was abruptly frozen following the expose of Cashgate. So bad was the situation that Banda lost the vote in 2014. APM assumed office in but failed to restore donor confidence in the economy.
I believe it should have been possible to grow the economy significantly had Bingu and those that came after him maintained the momentum gained between 2004 and 2009. We are where we started from 1994 largely because of poor leadership.
The question becomes pertinent in light of the validation exercise which has shown that the economy has grown by an average of 4.39 throughout the multiparty dispensation. To become a middle income economy, there was need to double the growth rate.
Was that realistic? Obviously, not!