Agriculture the mainstay
About 85% of the country’s population relies directly on the agriculture sector for their livelihood. The sector contributes 30% to the GDP and brings in over 80% of the country’s export earnings. However, statistics show that over 65% of Malawians still are poor.
Kalua says Mutharika has to put up well-thought-out policies on agriculture that are different from current policies, which put too much reliance on smallholder agriculture. “This has led us into this poverty situation which is still prevalent in Malawi,” he says, “the country needs to take radical approaches on agriculture or even moving out of it.”
In his State of the Nation address on 17th June during the opening of the 45th session of parliament, Mutharika said his government will
implement “sound macro-economic policies” to enable the economy, which he said was fragile, to attain full recovery.
The Malawian economy is currently performing poorly due to problems which economists say have emanated from fiscal slippages, among other causes. Several Malawi donors have already expressed grave concerns over the country’s poor public finance management and economic governance.
“My immediate task is to reverse this gloomy and precarious trend. My government will design and implement sound macroeconomic policy reforms that will transform the economy to attain full recovery and achieve sustained inclusive economic growth and development,” said Mutharika.
Mutharika also said he will institute reforms in the agricultural sector to support viable agro-processing industries, while at the same time increasing agriculture production through increased investments in agriculture extension, research, livestock production, horticulture, fish farming and irrigation agriculture.
He said he will continue to implement the Farm Input Subsidy Programme, which the late Mutharika introduced in 2005 to support maize production by subsistence maize farmers.
“We are, however, aware of the challenges faced in the implementation of the programme,” he admitted. ‘To address the challenges, government will abolish the coupon system and put in place measures to ensure that the subsidised inputs are made available to subsistence maize farmers who deserve it.”
Mutharika explained in no uncertain terms how his administration will deal with the corruption which forced donors to withhold aid during his brother’s reign and during the reign of his predecessor, President Banda.
“Corruption is evil as it deprives the people of Malawi, particularly the poor, of their legitimate right to economic prosperity by diverting resources meant for socio-economic development into the pockets of a few greedy individuals. It also scares away potential investors. My administration will, therefore, maintain zero tolerance to corruption, fraud, theft and any other economic crime.
“There will be no sacred cows! Indeed, there will be no untouchables! Mr Speaker, Sir, some of the measures which my administration will adopt to fight corruption include: prosecution of all public officers and private sector individuals involved in the theft, fraud and mismanagement of public resources.”
Mutharika invited all the 11 candidates who stood for the Presidency to assist him inrebuilding the country, promising to approach them one by one in the near future. He also said his administration will have a 20-member cabinet, including Deputy Ministers, to cut down expenditure.
But a human rights campaigner, Timothy Mtambo, says it might be too early to believe what the President has said. “For instance, during the first term in office of Bingu wa Mutharika, he had a lot of pressure from the opposition and delivered what Malawians expected. The nation thought if they would give him a full mandate with the majority, he will do better. But what happened was the opposite of what was expected,” he said.
Chairperson for the CABS, Alexander Baum, says the most important thing the new Mutharika administration could do to win back donor confidence will be to put in place the right polices that would support good public finance management systems and good micro-economic policies that are growth oriented.
“There is wide range of policies that could be put in place to promote economic growth. I think if the country can maintain a growth figure of, let’s say, 7 to 9% for a period of five to 10 years, you will see that the country will seriously migrate from donor aid dependence,” says Baum.
Mutharika told Malawians his administration is determined to achieve economic growth of 7% in the next five years.