LILONGWE—There’s no need to call for the resignation of the Malawi government because problems are being looked into and the economy will be in better shape next year, Malawi’s Finance Minister Dr. Ken Lipenga said Tuesday.
The minister was reacting to calls by the second largest opposition party in the country, the United Democratic Front (UDF), which through its leader in parliament, Ibrahim Matola, said it would be prudent for the Mutharika administration to take a leaf out of the recent Italian and Greek experiences where the governments resigned after failing to manage their economies.
Lipenga accused Matola of showmanship and said the government had put in place measures to deal with the current economic challenges: severe dollar and fuel shortages after donors cut off aid and the failure to get credit line from the International Monetary Fund over governance concerns.
"The slower growth in the manufacturing and transport sector has seen our challenges due to scarcity of foreign exchange, shortages of fuel and intermittent power supply. At household levels people’s purchasing power has been affected due to poor tobacco revenues," said Lipenga, acknowledging that Malawi’s economy was in a funk.
The minister said the southern African country’s economy this year would grow at 6 percent, down from a projected 6.9 percent but said the economy had stabilized as seen in maize prices because of a tight fiscal policy.
While the country had two months import cover of foreign reserves, the minister said economic growth would grow to around 6.6 percent in 2012. He said Malawi’s Gross Domestic Product (GDP) per capita currently stood at USD378, up from USD207 in 2005.
But UDF’s Matola said all that was on paper; reality on the ground was different. He said assumptions the government made for the zero deficit budget (ZDB) – formulated in anticipation of donors withholding aid and ZDB uses local resources - had failed.
"I ask the Minister of Finance to take responsibility and call for an early general election or resign now. These people should walk out here and learn from Greek and Italy where they failed," said Matola, a remark which didn’t go down well with government officials.
Leader of the House George Chaponda, who is also education minister, accused Matola of not telling the truth. He said when the UDF in power, between 1994 and 2004, it ruined the country’s economy.
But Matola shot back: "You were part of the mess!"
And then Chaponda said the persistent fuel shortages had only been going on for the past six months but Henry Dama Phoya (Blantyre Rural East) checked him.
"That is an insult…to suggest that it’s only [been] six months,” Phoya said. “Malawians have been suffering for long."
©2011 The Maravi Post. Reproduction authorised, with usual acknowledgment