MCP Wants Bingu to Resign
Malawi's main opposition party MCP has said President Bingu wa Mutharika and his Democratic Progressive Party must resign if he has no idea on how to solve the current economic challenges rocking the country.
MCP Finance spokesperson in parliament, Mr. Joseph Njobvuyalemba said this Monday in response to the mid-year budget statement delivered by Finance Minister Dr. Ken Lipenga on Friday, February 10.
In his speech entitled, My Eight-Point Plan for Resuscitating the Malawi Economy, Mr. Njovuyalema said Dr. Lipenga was really at pains to explain how the 2011/2012 national budget had fared in the past six months.
He claimed government had lost direction and seems to have no clue how to resolve the current economic problems, saying even the Minister was not inspiring in his speech.
“He almost turned himself into a dramatist as he almost turned the House into a theatre, and we take this as an attempt by the Minister to turn the minds of the people away from the shortfalls of his budget, to his linguistics,” said the MCP Spokesperson on finance issues.
“I view a National Budget as a very serious matter. It affects the lives of millions of Malawians, therefore I urge the Minister to take my observations to his statement very, seriously,” he continue his speech.
According to Mr. Njovuyalema, the Zero Deficit Budget is an experiment that has failed.
“This experiment has failed. It has punished Malawians and threatens to worsen their lives through loss of jobs,” he said.
According to Mr. Njovuyalema, the Zero Deficit Budget has also punished the private sector and continues to threaten the closure of companies.
“Mr. Speaker Sir, we in the MCP foretold and warned that if carelessly conceived, the Zero Deficit Budget would be equal to the Zero Development Budget,” said Njovuyalema
Then to substantiate his claims, the MCP lawmaker cited a number of areas where he said the government had goofed.
Slowing Down of Economic Growth
Mr. Njovuyalema said, “The Minister of Finance has been honest enough to give one example of the failure of the Zero Deficit Budget. The economy has slowed down to 6.0 percent. Why has economic growth dwindled from the highs of 6.9 percent?”
According to Mr. Njovuyalema, the economic slowdown is because government has carelessly handled relations with tobacco buyers.
“Low tobacco revenue has in turn affected our import cover to 1.5 months, as at December 2011, from 3 months cover. It is because government has failed to sustain the trust of the US government who should have supported us with electricity rehabilitation. It is because government is still failing to manage forex. Mr. Speaker, this is why the economy has contracted, and we hold government accountable for such carelessness,” he said.
Failure to Manage Monetary Sector
“Mr. Mr. Speaker, most of the problems with our economy, which are translating into the failure of our budget, is to do with the shoddy performance of our monetary sector.
“As the Leader of Opposition said, the problem is that decisions on monitory issues are being made at State House.
“This is why the dollar is officially at K165, while it is selling like hot cakes elsewhere within Malawi at K270. Government is deliberately digging its own grave by allowing the thriving of a huge black market,” said Njovuyalema.
He further said, as a result of the on-going economic hardships, some companies are closing shop while others are retrenching workers enmasse.
“In Kasungu, a tobacco and agriculture company has retrenched over 11,000 workers and Ministry of Labour knows about these statistics. PTC is reported to close some of its shops and retrench over 1,500 employees,” he said.
The MCP spokesperson said it was high time government mobilized donor support and factor into the budget the donor funds which were removed last year.
“How can the budget continue without the budgetary support from donors? This is the other major reason why the Zero Deficit Budget has turned topsy-turvy and is limping jiggery-pokery like an unpiloted plane,” he sai.
“Budget Support from donors, especially from the group of Common Approach to Budget Support (CABS), has in the past budgets given Government freedom to use the money with discretion. Obviously, Government in its discretion was using part of the donor budget support from CABS to cushion recurrent expenditures. This is why salaries were being paid on time, this is how the forex situation was supported, and this is why infrastructure projects could run on time without too many stoppages.”.
He said government should accept that the absence that the drought of budgetary support from donors has led to the current fiscal crisis.
“Our advice and tip to Government is that we need to make a final move in negotiating with the donors so that budgetary support can resume. If Rugby is not your game, give a chance to those who know it. And if you don’t have teeth to chew a bone, give it to those that have teeth,” he said.
But in his midyear budget review statement, Dr. Lipenga, the Malawi Finance Minister, maintained that Malawi performed above expectation despite criticism against the Zero-Deficit Budget.
President Bingu wa Mutharika has also repeatedly defended the Zero Deficit Budget (ZDB) which government introduced after falling out with traditional donors including Britain.
“Adopting zero deficit budget is not rejection of donor support but what we don’t want is begging,” said President Mutharika in Blantyre on Saturday, February 11 when he opened the new Malawi Revenue Authority (MRA) office complex – Msonkho House.
When he opened parliament, the President also faulted some commentators for not understanding the real idea behind the zero deficit budget.
“The zero deficit budget has unwarranted unnecessary debate from those who haven’t understood the concept. The rationale behind the concept is that recurrent expenditures in the national budget be financed from our own domestic resources while development projects will continue to be financed by grants and loans from external sources.
“Forty eight years after independence we should not still be asking donors to pay our salaries, house allowances, government rentals. Is that what is meant by independence,” queried Mutharika in his state of the nation address in parliament last Friday.