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Malawi Economy suffers despite debt relief |
DEBT
Malawi is a landlocked country and because of its geographical position,
suffers
economic hardships. But is this the only reason for the country’s prevailing
poverty?
Malawi has now managed to convince international donors to scrap some of the country’s mounting debt. But economic experts warn that debt relief will not offer a lasting solution to the country’s economic woes. At a recent meeting, the international donor nations (the Paris Club), assured a Malawi delegation led by Finance Minister Matthews Chikaonda, of easier concessions to its external debt which will be reduced periodically over a twenty-year period. Both the World Bank and the International Monetary Fund have demanded the views of a cross section of leaders of public opinion in the country, as to determine how the money from the debt relief programme should be used. This will ensure accountability and transparency.
All this comes in the wake of reports of widespread corruption in government circles, involving senior civil servants as well as cabinet ministers — corruption which has caused the government to lose a great deal of taxpayer’s money. At least three cabinet ministers have lost their portfolios in connection with corrupt practices in their ministries, and some fifty-five civil servants, politicians and business men and women have been warned of «imminent prosecution» by the Anti-Corruption Bureau.
The Malawi Economic Justice Network, a body dedicated to promoting social equality, has spoken out critically about the government’s handling of the economy. At its mid-January 2001 meeting held in Lilongwe, the Network, through the Catholic Commission for Justice and Peace (which has been spearheading the campaign for debt cancellation), came up with a number of recommendations which, according to the Network, will try to bring equality in society, i.e. between the «haves» and the «have-nots».
Borrowing is no solution
The Network says Malawi will never find a solution to its poverty situation as long as it continues to ask for, and receives loans. Borrowing is no solution. It does more harm than good to the country. The government should make every effort to reduce looking for loans, and instead intensify its poverty reduction programmes, by making every effort to improve the economy through people’s own efforts. In this way they will no longer depend on the government for everything.
Exley Silumbu is the chief economist at the Conference of Chambers of Commerce and Industry. He attributes some of Malawi’s problems to high interest rates which, he says, «are harmful to the country’s fragile economy». Some economists say the persistent depreciation of the local currency, the Kwacha, coupled by the fall in price of tobacco, which is the main foreign exchange earner, plus escalating fuel prices, has shaken the economy badly.
Kassim Okhai is a prominent business personality and is currently chairman of Malawi’s National Economic Council. He says that spiralling economic difficulties and especially soaring price rises, are strangling the government’s efforts to shield its citizens from starvation.
Indeed. it would seem that Malawi’s best hope for salvation lies with the people themselves!
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