Drought and corruption in Malawi affect port volumes

Volumes of cargo moving

through the ports of Beira

and Nacala are being affected by

drought, government inefficiency

and corruption in neighbouring

Malawi.

The two ports are vying to

handle imports of fertiliser,

farming chemicals and other

goods for Malawi, and the export

of products such as pigeon peas

and tobacco.

“The central challenge that

Malawi faces is with respect to the

actual implementation of stated

policy objectives,” states an IMF

country report on Malawi.

“This calls for an emphasis on

the functional strengthening of the

country’s public sector institutions

so that Malawi is really able to

‘break the cycle’ of vulnerability,

better absorb the impact of future

shocks and maximise the impact

of available domestic and foreign

resources.

“Moreover, while meaningful

steps have been taken to reduce

the risk of a ‘cashgate’ type

event from reoccurring, gaps in

oversight do remain – particularly

with regard to public procurement

– that will require continued

efforts to strengthen governance

and accountability frameworks,”

states the review.

It is estimated that around

US$280 million in aid and IMF

loan funding was stolen between

2009 and 2014.

When evidence of corruption

came to light in September 2013

a number of donor governments

suspended support, and investors

put plans on hold.

The repercussions of

“cashgate” continue to stifle

economic growth, according to a

statement issued after an August

stakeholders conference sponsored

by the IMF and the Malawian

government.

It states: “Uneven policy and

structural reform implementation,

the sizable recourse to domestic

financing after the large-scale

theft of public funds, and weatherrelated

shocks collectively stymied

economic growth and poverty

reduction efforts” following

the granting to the Malawian

government of an extended credit

facility by the IMF in 2012.

The facility provided US$143.5

million to support government

efforts to reduce the impact of

floods followed by droughts.

“Extreme weather has hit

Malawi’s economy hard over the

last two years,” states the IMF

report.

“Severe flooding followed by a

drought – the worst in its history

– caused widespread crop failure

and placed 6.7 million people at

risk of starvation.

“But a remarkable humanitarian

effort helped reduce the impact

of the drought on the most

vulnerable segment of the

population,” it adds.

A big contributor to the

“remarkable” intervention was the

support provided by the ports of

Beira and Nacala, together with

transporters, freight forwarders

and clearing agents.

Mountains of maize were

bagged and moved out of the ports

at the height of the drought relief

programme in the second half of

2016, with minimal delays.