By Linda Kwanjana
True to the popular Chichewa saying _mvula ikagwa kuchuluka zoliralira_, there have been a lot of noise in reaction to the just announced 44% devaluation by the Reserve Bank of Malawi.
There are people who by the sound of their tone sounds, it is mostly DPP cadres who are ignorantly blaming the government for the devaluation. In their argument they say President Lazarus McCarthy Chakwera should not have devalued our currency the way Bingu did.
What these people are not saying though is what that stubborness brought to the economy.
Christened the “economic engineer” by former President Bakilili Muluzi in the run-up to the 2004 general elections, Bingu went on to become a star during his first term due to his handling of the economy.
Malawi experienced exponential economic boom and our economy was said to be one of the fastest growing economies second only to Quatar.
But that did not last as the period of economic growth gave way to the dark phase of economic struggle in Malawi’s history, particularly in 2012.
If there was a period in the immediate past that Malawians endured real economic hardship, it has to be that period. Bingu stuck to his gun against the IMF advise to devalue the Kwacha for the wellbeing of the economy, Bingu stuck to his gun not to devalue the currency. At first, it seemed like a good idea, but as time passed by, it turned out that what seemed to be a good idea turned out to be the worst nightmare; the economy began to crumble before our own eyes.
The country experienced probably the worst dry spell of forex in history this far. As the forex reserves dried up, the country was plunged into a crisis; forex scarcity led to shortages of fuel and other basic commodities. People had to queue up for such basic commodities.
Everyone knows that Bingu died trying to resuscitate the dying economy he laboured to build for years. It had to take President Joyce Banda’s cooperation with the IMF to devalue the Kwacha for the economy to start kickinh again.
So, Bingu is not a good example when it comes to issue of devaluation. It was Bingu who said we always learn from our past, if anything; President Lazarus Chakwera must have learnt from Bingu’s costly mistakes.
By and large, President Chakwera was at a critical juncture this time around, he had to make a decision either to devalue the Kwacha or leave it as it was and continue have a devastating impact on the economy.
But judging by the past, Chakwera was able to come up with a good decision. As painful as it is, devaluation is a good decision.
The encouraging thing is that, amidst all the noises, so far, there is a consesus by economists that President Chakwera has done well to devalue the currency. They say this devaluation should have been done long time ago.
Not only economists are in agreement with the devaluation, politicians and Human Rights activists alike are also in agreement.
Former Vice President and Finance Minister Cassim Chilumpha, Atupele Muluzi, Undule Mwakasungula, [Professor] Chioza Bandawe, Joshua Chisa Mbele have all said devaluation is not a monster that has come to devour us; instead it is the right measure to prevent the economy from further slumping.