Economic analysts warn Govt on Chinese aid

Political and economic analysts have faulted Malawi-China bilateral agreements amid speculation such pacts have clauses that allow China to seize national assets in the event that the borrowing nation defaults on its loan repayments.

The analysts were speaking against the backdrop of news that the Chinese government would be taking over national assets Zesco and Zambian National Broadcasting Corporation (ZNBC) in neighbouring Zambia following their government’s failure to repay the loans.

Mzuzu-based political and economic commentator Emily Mkamanga said the Chinese government is putting Capitol Hill at an economic disadvantage by including clauses that require the Malawi government to buy raw materials from China and hire Chinese labour.

“On a personal basis, it is like giving money to someone and telling them they can only use that money to buy bananas from the lender. That is holding someone to ransom.”She said: “Those aid agreements are putting Malawi at a disadvantage. Why do the Chinese say we should only buy from them? If they are giving us a loan, there is no need to buy raw materials from their country when we can buy from somewhere else.

Malawi leader and Chinese leader

Chancellor College political scientist Ernest Thindwa faulted local politicians for soliciting loans from the Chinese government to fund projects that ensure their political survival at the expense of national development.

He urged politicians to prioritise loans that will ensure economic productivity.

Said Thindwa: “What is needed in Malawi is to borrow money and invest it in productive sectors where the government should be able to repay the loan without asking the taxpayer to finance it. I like to think that any productive aid is aid that leads to economic productivity and allows the country to finance loans with funds derived from the same project.”

He called on politicians to be transparent on the loans and the subsequent conditions attached to them.

Centre for Human Rights and Rehabilitation (CHRR) executive director Timothy Mtambo said government should be in a position to direct aid funds to projects that improve people’s social welfare and livelihood.

“Instead of focusing on development projects like stadiums, we need leaders who can tell our developmental partners that we need hospitals and universities more than we need to be entertained [with football matches],” he said.

Commenting on the issue, Minister of Information and Communications Technology Nicholas Dausi said President Peter Mutharika cannot sign an “inappropriate” deal with any government.

He said: “President Mutharika is a trained and renowned lawyer. So, I doubt he would sign an agreement that would put Malawi at a disadvantage. But I will have to consult with the Ministry of Justice and get back to you.”