Malawi’s Economy: A mountain too high to climb?

Since April 2012, when Joyce Banda took over the running of the government from late Bingu wa Mutharika, Malawians have been experiencing a mix of hope and despair.

The optimistic international community has released some budgetary support for the country, which was suspended during Mutharika’s presidency, following significant financial and governance changes made by Malawi’s new president. Fuel and forex shortages improved almost immediately.

Some five months down the road, Malawians have been told that the 18 month Economic Recovery Plan will be the answer to the country’s economic challenges; this has made a number of netizens react and respond in different ways.
Watipaso Mkandawire, in a post titled ‘Mountain Too High‘, explains the realities of Malawi’s economy:

Barely 5 months after occupying Plot No. 1, the economy, is struggling with voices of disgruntlement growing by the day. The noticeable challenges include; increase in prices of basic commodities, fuel price increase, re-emergence of fuel queues, runaway inflation; dissatisfied low and middle-class; poor tobacco season, 1.2 million people facing hunger; etc. Many observers argue that JB and her People’s Party have no vision for Malawi and that what we are seeing is a “Subsistence Government”. In all fairness, JB inherited an economy that was on its knees (if not on its back) and the country was almost bankrupt.

A seasoned media practitioner, Levi Manda, discusses with a visiting friend about a pro-poor budget:

“This country favours the unproductive: government ministers, religious leaders, MPs, chiefs, heads of government institutions and most lazy villagers.”

“How?”

“Ministers and MPs enjoy duty free importation, free transport, free housing, free marriage, unlimited untaxed allowances; chiefs enjoy free housing and salaries. The other year, one principal secretary gave himself annual leave money equivalent to 1000 leave days!”

However, the president knowing fully the economic realities, seems to have made an effort to address the country’s financial problems by cutting her own salary. Journalist Kondwani Munthali reports:

“In support of the austerity measures, the President and the Vice President have voluntarily decided to reduce their monthly salaries by 30 percent with immediate effect. Government is also actively considering other cost cutting measures and these will be announced in due course,” said Kachali. On the Economic Recovery Plan, the Vice President said it has identified five strategic sectors that can quickly that can quickly turn around the economy for export led growth and foreign exchange generation.

This news was welcome by all sectors of Malawi. In general, Malawians are looking forward to the recovery of the economy, which has so far become hot topic in the country as next presidential election in May 2014 approaches.