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Bingu hits back at IMF; tells Malawians ‘I know what I’m doing’

BLANTYRE–Pres Bingu wa Mutharika, whose cash-strapped government is grappling with a crippling fuel shortage, has hit back at the International Monetary Fund (IMF), saying the Fund advised Capital Hill that all foreign exchange receipts from tobacco sales – some $400 million annually – shouldn’t be controlled by the central bank but be sold through commercial banks.

Speaking in Chichewa on state radio and television, Mutharika, whose handling of the fuel crisis and the economy as a whole has attracted criticism from many quarters, said: “Forex is no longer in the commercial banks. It’s with people who run hardware shops.

“Now they [IMF] want government to devalue to Kwacha to K180 to a dollar. If we do that prices of essential products and services will go up including transport. Who will win?”

He said people had bought the forex and were hoarding it, waiting for devaluation so they could make a profit.

An economist himself, the Malawi leader said devaluation of the Kwacha would lead to inflation and a steep rise in prices of food, goods, transport and services.

“I have been arguing with IMF to tell me how I am going to protect poor Malawians if prices for essential products go up.

“They are not telling me anything, all they say is that we will find a way. Until IMF tells me how to protect my poor people, I will not allow devaluation of the kwacha,” he said.

On fuel shortages, Mutharika said it was the Fund which had always insisted that importation of fuel products should be left in the hands of the private sector.

His government, he said, disagreed with the IMF over this because the oil companies had failed to build strategic reserves which could last months.

Mutharika said government would establish the National Oil Company.

“Government will take over the responsibility of fuel importation. We will establish our own company, a government company, which will be importing fuel and selling to the private companies and we will be keeping some of the fuel as well so that we have reserves adequate for six months or over just like what our national Food Reserve Agency does with maize stocks.”

The president said as of Friday, June 24th, fuel was being loaded onto vehicles in Dar es Salaam, Tanzania.

“We should have enough supplies by Monday or Tuesday next week and later we will have 6 months cover.”

Mutharika also defended the much-criticised zero deficit budget, saying “Malawi should learn to stand on its own by paying its civil servants wages through its own resources after 47 years of independence.

“I am not saying we will not need donors. We will need them but it should be for development. But for money to be paying civil servants wages, we need to get that from our own resources. If the donors pay even our salaries, are we independent?”

He said people the government can’t function without taxes and people should expect to pay more.

Mutharika, who ends his mandatory two five year terms in 2014, said many donors were happy with the zero-deficit budget and will give their support.

“Malawians, why do you doubt me? I can’t take Malawi on a wrong path,” he said, adding that when he assumed power in 2004 ” people were dying of Aids but I ordered that there should be free ARVs.”

He said people were dying of hunger “I ordered that there should be fertiliser subsidy and we ended hunger.”

“Now why do you doubt me that I don’t know what I am doing? I know what I am doing,” Mutharika said.–maravipost
Read more: http://www.maravipost.com/

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