IRRIGATION? GOVERNMENT? PRIVATE SECTOR? GOVERNANCE!

Yesterday we read in the paper that government, in the person of Minister of Agriculture Chaponda, is going to transfer funds from FISP (farm input subsidy program) to irrigation. Recently we heard a lot of opinions from experts on technical issues like irrigation, value addition, winter cropping and more. These calls are not new, these ideas have been around for decades. Initiative after initiative has been launched and has failed. This shows that the obvious is not where the actual problem is. Obvious is that we need these techniques. But what should also be obvious is that the way we have been implementing this has failed completely, Malawi is a least developed country.

Let’s look at the facts: the FISP was moderately successful when it was introduced. We could say that the challenges were growing pains that could be eradicated as experience with the program grew. But the opposite happened: the experience with the program was not used to improve it, and make it more cost effective. It was used by unscrupulous politicians, unscrupulous civil servants and unscrupulous well-connected business people to divert money and inputs. The cost of the program sky rocketed, while the efficacy went down the drain. Now it is a millstone round the neck of the tax payer, and it only benefits the few well connected unscrupulous thieves.

The FISP appears not easy to implement well: large amounts of money are going round to procure, transport and distribute inputs to deserving people. And at every stage money and inputs were diverted.

Look at other development projects: the procurement of tractors and other farming equipment: failed.

The construction of a sugar factory in Dowa: failed.

The Green Belt Initiative: failed.

The Nsanje Inland Port: failed.

Now look at the complexity of a large (or huge) irrigation scheme. Here are the unanswered questions:

Who is going to procure, install, maintain and manage what type of equipment where?

Who is going to benefit?

Apart from the tax payer, who is going to pay for the use of equipment (or the resulting water)? Is that going to be the farmers? Are they going to do that on credit? How is the credit going to be managed? (Think of the study loans, the MSB fiasco, the YARDEF etc. All government loan schemes that were never repaid, which means the tax payer foots the bill!)

If we look at the complexity of management of this irrigation plan, it is quite clear that this is too complex for a government that makes such a mess of a simpler FISP, that now has to be abandoned because corruption, inefficiencies and incompetence in the government apparatus have rendered it useless. This irrigation scheme is much bigger and more complex than the sugar factory in Dowa that is not running, which means the tax payer looses a huge amount of money to the types who profited from it. There is no reason to presume that the same is not going to happen with the irrigation scheme.

The alternative would be the private sector. This could be either big companies (foreign investors or local companies, both representing rich people), or the smallholder farmer. The big companies have expertise, but they will not benefit the poor, only the rich. And on top of that the Malawi business climate is so hostile that DFI (Direct Foreign Investment) is near impossible to realize. Smallholder farmers (they are private sector too!) do not have the expertise to install, maintain and manage a scheme this complex. So that seems not realistic either. To create the expertise would take decades: the quality of education for the poor is very poor, and only dwindling now the Malawi Government is diverting funds from education to State Residences (which is: the president’s personal comfort). So even if extension work were prioritized this is not realistic either.

That leaves the conclusion that this scheme is doomed before our tax money has been invested. And that makes it a bad investment (bad for us, the tax payer that is, but of course it will be good for the unscrupulous politicians, unscrupulous civil servants, and unscrupulous well-connected business people who are hunting for kick-backs, lucrative contracts, opportunities for corruption and such).

What is the alternative?

We need to think out of the box. Inside the box has failed for 51 years, and we should do away with business as usual. We need to change the way we look at government, governance, the responsibility of government and private sector, and the whole organization of the economy.

Government has proven for 51 years that it is incompetent to run big initiatives like this irrigation scheme, and this is costing us tax money every day. Tax money that could have been used productively if well managed.

We need to stamp out corruption, I have written about this before, with the actionable recommendations to government that our (clue less) president has been asking for at the meeting with PAC (Public Affairs Commission) recently.

We need to reorganize the civil service, which means the President will have to back the Chilima initiative much more forcefully than he is doing now. And we need to overhaul the regulatory frame work of the whole business sector, so it is 100% consistent, 100% clear, and lean, and we need to enforce it consistently. In the book Economic Gangsters the technicalities of this operation are clearly described with a wealth of real world examples, and a wealth of “actionable recommendations”.

We need to create rule of law for all, not just for the rich and powerful, which means overhauling the justice system, making it independent from the President, and forcing individual judges and magistrates to deliver quality in time. (those who don’t should be demoted, those who do should be promoted)

We need to grow the private sector, so it can create wealth (which it is good at). We need to overhaul the government sector so it can become good at redistributing wealth where needed, from the rich and powerful to the poor (and not the reverse, which sometimes is the case now).

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