IMF asks donors to release Malawi budget support
By Nyasa Times
Published: January 20, 2010
The International Monetary Fund (IMF) has asked a grouping of international donors to unlock budgetary support to Malawi which they have been withholding awaiting a new IMF programme, the Fund said on Wednesday.
Malawi’s Finance Minister Ken Kandodo (pictured) said support from the Common Approach to Budget Support group (Cabs), a donor grouping of Britain, European Commission, Norway, Germany, the World Bank and the African Development Bank, would help ease a foreign exchange shortage in the country.
“Donors were withholding $545 million in budgetary support in the absence of a programme with the Fund … but we are now relieved that the Fund has written the Cabs group in the country to release funds,” Kandodo told Reuters.
IMF resident representative in Malawi, Maitland Macfarlan, said: “I can confirm that we have asked the Cabs group to release budget support to Malawi ahead of next month’s IMF board meeting.”
Malawi is heavily reliant on donors with budgetary support accounting for over 40 percent of the national budget.
The IMF board last month shifted the decision for a new programme for Malawi to February 10, worsening fears that the Cabs group would not release the funds on time.
Economists have said that the delay in the disbursement of donor funds, low tobacco earnings last year and big bills for imported fertilisers and fuel have contributed to the scarcity of foreign exchange in the last eight months.
Malawi’s programme with the IMF, the Exogenous Shocks Facility (ESF), was completed last year.–Reuters
Labels: DONORS, IMF, KEN KANDONO
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Bingu should take responsibility and not blame World Bank – economist
By Nyasa Times
Published: November 29, 2009
President Bingu Wa Mutharika is slowly losing his status as the “economic engineer” due to the current economic woes which have hit Malawi. A top Lilongwe based government economist has revealed to Nyasa Times that Bingu’s economic plans were more of theory than practical.
He observed that Bingu’s style of leadership was one characterised with blaming others for his misfortunes.
“Bingu is a person who can’t take responsibility for any bad thing. He wants to come out a saint in every situation hence his constant blaming of others on his failures.”
Mutharika has heaped all the blame on the current economic meltdown in the country on the IMF, World Bank and foreign investors.
“If the opposition was still strong, they would have shouldered all the blame for the current problems,” observed the economist who sought anonymity for fear of facing arrest and being under oppressive charges pressed for those critical of Mutharika government.
He wondered whether the IMF or the World Bank or indeed the foreign investors were responsible for borrowing [lending - MrK] Robert Mugabe $100 million.
“Since when did Malawi become a donor country? We are failing to fend for ourselves, yet we are able to give away such colossal sums to our neighbours,” wondered the economist working in government.
Meanwhile, a Mzuzu University professor has attributed the current forex shortage to
President Mutharika and his government officials who are investing outside the country.
“Look here, Bingu and his family are investing outside unlike Bakili Muluzi (former president) who put most of his investments at home. He (Muluzi) built Keza in Blantyre while Bingu is building Mansions in Europe.”
Other sectors have also accused Mutharika of deposing the “real economic engineer,” Goodall Gondwe from Finance Ministry and replacing him with Ken Kandodo who failed to run even his family business.
And a survey on the streets of the capital city Lilongwe have shown that the general public has lost confidence in Mutharika to turn around the country’s ailing economy.
“The problem is that the President is not offering solutions but blaming others. OK, if it’s true that the economy is in a mess because of the World Bank, and then what is he doing as Head of State to correct the situation,” asked a female employer of Shoprite, one of Malawi’s leading chain sores.
A local business man based in Area 25 observed:”Here it’s like the President has told us that it’s not me, but the World Bank and there is nothing I can do about it. My question to him is, why is he still President. Why can’t he give way for someone who can do something about it.”
Mutharika speaking on public radio blamed the World Bank and the IMF for causing foreign exchange shortages by forcing the country to liberalise the economy.
“The International Monetary Fund (IMF) and World Bank have been forcing us to have a free market economy…but now all foreign business operators externalise forex to Asia and the Middle East,” Mutharika said.
The two lending institutions are the major sponsors of Malawi’s economic reforms.
“The forex is ours, but there is no money at the moment. Right now we cannot import anything. How do I run this country? The forex is externalised to Dubai, Bombay and London,” said the economist turned politician.
Labels: BINGU WA MUTHARIKA, GOODALL GONDWE, KEN KANDONO, World Bank
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Constituencies need more capacity building than money—Kandodo
By Nyasa Times
Published: July 20, 2009
Finance Minister Ken Kandodo has told parliamentarians that the Constituency Development Fund (CDF) will remain at K2 million and not be reverted to K3 million as many members wish saying the constituencies need more capacity building than money.
Kandodo was speaking in parliament when most members contributing to the 2009/10 fiscal budget expressed dismay with the reduction of the fund from K3 million to K2 million.
The Minister of Finance announced in the budget statement that, the reduction of CDF is due to mismanagement of the fund by previous parliamentarians.
He told the House that the CDF will remain at K2 million and that government is committed to develop constituencies through other means
Kandodo said government is talking to the World Bank to have a loan of K3 billion which would help in development of constituencies.
He also said the K2 billion Youth Development Fund which was announced by government will work in a long way of mitigating economic pangs of constituents.
But Budget and Finance Committee chairperson, Ralph Jooma assured government that his committee would assist in setting up necessary control measures in the implementation of the CDF.
Jooma said the control to check any possible move to abusing of the fund would ensure the smooth implementation of the fund than reducing it.
“Upon successful completion of that exercise, we urge the Minister of Finance to consider an increase in the fund,” he said.
Despite concerns on the reduction in CDF, Jooma thanked government for targeting the rural poor in resources allocation as seen in the increased allocation to the district assemblies which he said is a welcome development.
Labels: CDF, KEN KANDONO
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New finance minister for Malawi
By Nyasa Times
Published: June 17, 2009
President Bingu wa Mutharika has named Ken Kandodo, a nephew of the late dictator Hastings Banda who ruled for three decades in a one-party system as his new finance minister. He will take over from Goodall Gondwe, who has been appointed minister of local government. Kandodo was Board Chairman for the National Food Reserve Agency (NFRA).
Gondwe who has worked for the African Development Bank and the World Bank before landing the finance portfolio, won the top accolade for the economic achievements Malawi has realised during the five years he has been minister of finance.
Commentators on Malawi discussion forum, Nyasanet described the cabinet as “lean but not pleasant”.
Pia Likoya said Gondwe has been demoted by being allocated the relatively low key local government ministry a.
“Being by-passed as a [Vice President] is bad enough; however a demotion to local government is what we call in legal parlance, a kick in the goalies. And to add insult to injury, he’s been substituted by Ken Kandodo. This is the joke of the year. What is wrong with this President,” posted Likoya his comment on the forum.
Economist Watipatso Mkandawire posted his comment saying the cabinet line-up might be a blessing in disguise.
“It might be a blessing in disguise to move Goodall to Local Government where there is a tremendous need for moving the decentralisation programme forward, expanding OVOP [One Village, One Product], and of course local Government elections, get City Assemblies working again. The challenge will be for Goodall to extract funds out of Kenani Kandodo,” noted Mkandawire.
“There is no ‘Life’ anything in public offices. Most people thought Goodall had an automatic ticket to the Finance portfolio and his appointment to ‘lesser Ministry’ is a shock to many people. Not only his “demotion” but the alleviation of Kenani Kandodo (MP) as Finance Minister. Obviously there will be panick in IMF, World Bank and other donors,” commented Mkandawire.
Malawians also commented on the cabinet composition on social networking site, Facebook where many expressed doubt that the Finance Minister was appointed on merit.
One observed that the cabinet is so full of “fabricated bourgeoisie, it is hilarious. “
Fr Boniface Tamani, chairman of Public Affairs Committee (PAC) also said the nation expected Gondwe would have maintained the Finance portfolio.
“He was able to speak the language of economics and be able to convince people all over the world. I felt he should have been maintained but of course it is the President who has the prerogative to choose who to be on what positions,” Tamani told a Zodiak Radio.
Kandodo is currently a Director at Chayamba holdings, a real estate business of the late dictator.
The new cabinet will be sworn-in on Thursday at New State House in Lilongwe.
Labels: FINANCE MINISTER, GOODALL GONDWE, KEN KANDONO
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