President Dr. Lazarus McCarthy Chakwera has highlighted high levels of toxic debt, fraud and financial mis-reporting to International Monetary Fund (IMF) and criminal cartels in the Democratic Progressive Party (DPP) regime as some of the obstacles his administration faced as it embarked on its development agenda.
Chakwera was speaking at the 59th Independence Day Celebrations at the Bingu International Convention Centre (BICC) in Lilongwe on Thursday.
He said he was disheartened with the $7 billion debt Malawi had accumulated, with no sustainable plan for repayment.
"On this day exactly three years ago, I stood before the Malawian people on Malawi's 56th Independence Day to be inaugurated as the 6th President of Malawi. Upon my assumption of this high office, we made three sobering discoveries that represented significant obstacles in our quest for progress. The first was our discovery of the $7 billion debt Malawi had accumulated, with no sustainable plan for repayment.
"The second was our discovery of years of fraud and misreporting at the central bank, following a forensic audit that I ordered early in my administration, which resulted in the cancellation of Malawi's program of support from the IMF and the need for us to effect disciplinary fiscal measures and reforms in order to restore the confidence of our partners and investors in our economic fundamentals.
"The third was the discovery of cartels that not only monopolize significant sectors of our economy, but that also collude with public officials to defraud the government and the Malawian people by smuggling raw materials and goods out of Malawi without remitting any revenue to the state as required by law," said Chakwera.
The Malawi leader disclosed that the net effect of these discoveries was the shrinking of the country's fiscal space at a time when it needed resources to stimulate productivity and economic activity through the development of infrastructure and the establishment of public service programmes that would lead to the achievement of job creation, wealth creation, and food security.
He said it is against this background that his administration moved 'very quickly to close the loopholes of wanton theft of public funds'.
Chakwera said this is why some people, who used to steal public money, are now crying that 'there is no such thing as easy money in this country anymore'.
"But the truth is that this is a good thing. It means we ended the culture of a few people in government treating the taxes of Malawians as easy money by dipping their fingers into state coffers for doing nothing and sharing it with their friends, because we knew that even though it would cause those who were benefiting from that system to feel pain, it would also ensure that state resources only go towards public service delivery for the benefit of the many, not subsidizing the insatiable appetites of the few," Chakwera prided himself.
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He added that his administration put in place restrictions on where government ministries, departments, and agencies could procure their goods and services, prioritizing small to medium enterprises that had been deprived of economic opportunities for decades.
He said this again has earned him enmity among those who had enjoyed a monopoly over government supply contracts for years.
"But I do not mind making enemies with those who exploit and defraud Malawians, because my only interest is to serve the Malawian people. Then thirdly, to further empower hard working Malawians and end the culture of rewarding the complacent and lazy, we increased the tax-exemption threshold for workers so that they would have more money in their hands for their efforts," said Chakwera.
President of the United Republic of Tanzania, Samia Suluhu Hassan, was the Guest of Honour at the event.
