…proclaims an avalanche of dollars after IMF return
…claims devaluation was part of his plan
Malawi’s travelling President waited until he returned from his 44th international trip- in a record three years to acknowledge that his huge appetite for travel was an expense the stretched public finances could no longer shoulder- he banned them, well until the new year.
The President who appeared shaken and did not sound confident of his own words, repeated a few threats- to investigate price increases triggered by his devaluation of the kwacha by 44%- which he claimed was part of what he has been preparing Malawians in the three years he has been in office.
“I assumed office with a heavy heart. This is our strategy to reset the economy which was sitting on broken bones,” said the President who presented alternative facts and missed the fact that he had found the kwacha at K750 and had depreciated to K1700 under his watch.
The President conveniently omitted to tell the nation why his government had cancelled a three-year US$112 IMF programme he had inherited from the Democratic Progressive Party (DPP) administration opting to present alternative facts to the chaos he has unleashed over the economy.
The President’s televised address declared that he has been working for the past three years for this moment and that institutions including the European Union would immediately release US$70 million for budgetary support. The EU Malawi office could not confirm the immediate release of the budget support, though senior officials had indicated they were considering the possibility.
He, however, indirectly agreed with The Investigator Magazine that he has been wasting public funds through his monthly sojourns that have added up to 44 in three years. Over US$10 million has been spent on his trips abroad which have attracted widespread criticism.
The President’s trips have seen him travel with a contingent of over 100 people at times and he announced the ban after returning from a trip where he had taken 70 people to witness a signing of US$20 million financing of the Makanjira road in Saudi Arabia and a Trade Fair in Egypt, where it is alleged he did not visit the Malawi pavilion.
“I have banned all travel with immediate effect, including Ministers and senior Government officials until the end of the budget year,” said Chakwera, whose rhetoric always projects Malawians as children he can always manipulate, as he is aware the next month is the holiday season.
Malawians on social media picked up his machination telling him that it was too little, too late as the year was already coming to an end in less than 45 days and that due to the Christmas and New Year holidays, it was unlikely that there would be events that he can be invited to.
The President presented the cancellation of foreign trips, alongside half-hearted measures to cut fuel allowances by half for senior public officials and limit training programmes locally.
The President himself is always on the road locally and he has not added his local trips to the ban.
On Wednesday, the President desperate to be seen as working, announced already running the project as new funds coming to Malawi after the ECF. The World Bank announced in May a US$265 million Agricultural Commercialisation and Improvement of Food Resilience project and an additional US$10 million for the most vulnerable.
Our fact-checking team indicates the funds were already committed and would benefit 112,000 households by setting up six irrigation schemes and not tied to the ECF as indicated by the President.
Our fact-checking team indicates that the EU has never made a firm commitment to release the US$70 million claimed by the President.
President Chakwera also engaged in presenting alternative facts only acknowledging the ECF and debt relief in 2006 but failing to acknowledge that Presidents Joyce Banda and Peter Mutharika managed to take the country back to an IMF programme.
He also announced that some of the funds will be released immediately, including African Development Banks US$30 million in direct budget support.
The President’s speech, however, was the first time he acknowledged that the economy was near collapse as speeches monitored just as late as 21st October 2023 when he launched the 2023/2024 Affordable Input Programme (AIP) in Kasungu he boasted that his administration was delivering the change he promised.
Months earlier speaking in Nkhatabay when he launched a water supply project, he said Malawians were now better off than before and could look to a better future.
His change of tune over the economy and his government’s approach are all familiar to Malawians, as he has been saying one thing and doing the exact opposite that most people were cautious to react to his statement, opting to “wait and see” if he will walk his own austerity measures.
On direct relief to the public, the President did not present any figures or direct intervention, asking the Minister of Finance Simplex Chithyola to include “some provisions to cushion small businesses” and “reasonable wage increase for Civil Servants.”
The President did not indicate how long Malawians are to persevere to the largely self-induced collapse of the economy, only stating forex would be available and proposing that the Finance Minister should reduce Pay As You Earn (PAYE) in the budget for next year from April 2024.
He said his administration was placing hope on Mega Farms, Mining and EcoTourism but did not elaborate on how these could improve the economy in the short and medium term, leaving most comments on his social media pages to call it “usual rhetoric.”
Weeks after Lilongwe Water Board announced a K8500 sewerage water charge for every individual with a toilet in his house, the President said he had ordered a halt in water hikes, most of which had already been implemented on 1st November. He was not clear about which hikes he was referring.
The President, whom those close to him say does not have a grasp of economics, failed to articulate the path the country will undertake in the next year to recover and grow the economy, save to celebrate the grants, loans and the ECF as coming to solve the foreign exchange shortages.
“He only spoke in general terms stating that this devaluation is something he envisaged. If you asked him last month he would have been telling you Malawi is on the move, and things are getting better. The speech does not inspire hope. It only confirmed President Chakwera has no idea how to fix the economy,” said an economist we asked.
The IMF programme will run for four years giving Malawi around US$11 million every quarter based on agreed targets which includes limiting government borrowing.
Malawi’s debt before devaluation was around K4.1 trillion when President Chakwera took office in June 2020 and it now stands at K9.7 trillion mostly borrowed by his administration to finance recurrent expenditures than projects.
