A panel of economic experts has hinted that the country’s debt management continues to fail to yield desirable impact due to a failure to create a system that creates value for money.
Economic experts including Dalitso Kubalasa of the IM Swedish Development, Donasius Pathera from the department of Public Finance Management and Dr. Upile Matola, an economist at the ministry of economic planning appeared in a panel discussion held on Times Television on Wednesday.
Kubalasa lamented that, almost 60 years after independence, Malawi’s public expenditure continues to fail to provide value for money as a result of corruption, a failure to adhere to the public finance management legal and policy frameworks, power problems and other issues.
“We are trapped in a vicious cycle. To change the status, we really need to work on changing our ways and it’s not going to be easy,” observed Kubalasa.
Pathera concurred with Kubalasa, pointing out that there is need to tighten the legal and policy frameworks to ensure that deterent punishments are handed down to officials caught abusing public resources.
“We need tough penalties. There are some loopholes that need to be sealed. It appears the current laws does not offer adequate deterrence. We need to benchmark with other countries that are doing well in curbing maladministration and abuse of state resources,” he added.
Dr. Matola also emphasized the need to ensure a semblance of balance between income and expenditure.
He stressed that the country must move away from depending on debt to cover budget deficits saying this will have long term economic shocks.
“Another development is that for a long time, our public finance management track record is characterized by variance and deviation on both projections and actual expenditures. This shows that these aspects are not being properly managed,” he observed.
Dr. Matola added that working on achieving realistic projections and living within means are the stepping stones towards slashing debt.
“Estimates are difficult to come up with but the trend of under-estimation or missing targets impacts on the country’s financial position. It’s either we under-collect or we spend more than we have in the bank. Either way, we turn to debt,” he added.
The Tuesday panel discussion is one in a series of many organized by a consortium comprising of Oxfam, Economics Association of Malawi (ECAMA) and Lilongwe University of Agriculture and Natural Resources.
The three partner institutions are working together in a three-year project funded by the European Union (EU) on “Enhanced evidence-based research to inform policy decision making in Public Finance Management (PFM)”.