2015/16 budget difficult to sell, says Goodall

Finance, Economic Planning and Development Minister Goodall Gondwe yesterday warned that the forthcoming 2015/16 budget will be “difficult to sell to members of Parliament (MPs) and all Malawians”.

Gondwe, who hinted that the annual fiscal plan will be “an intellectual budget,” fired the warning shot in Lilongwe when he presided over the 2015/16 pre-budget consultations, soliciting views from civil society organisations, companies, the business community and the public in general.

“We will have to undergo stringent reductions or shrinking of the budget in real terms…it will be an intellectual budget that will be difficult to sell to everybody, including our MPs,” he said.

The minister said the International Monetary Fund (IMF) has advised government to reduce the ratio of domestic debt to gross domestic product (GDP), which is at 18 percent and hinted that government will have no choice but to restrict domestic borrowing.

He said the global lender is also not particularly pleased with the ratio of the national budget to GDP at about 35 percent; hence, the need to reduce the figure.

“Forty percent of our total budget is consumed by the public sector and this is too high and we have been asked to reduce this, hence, the budget should be a little bit smaller,” said Gondwe, stressing that in the next budget, government will also have to part away with about K100 billion to repay for the “past consumption” in form of arrears.

He said in the next five years, government is optimistic to move towards self-sufficiency by moving away from donors.

Said Gondwe: “The more donor support that you have, the more it shows that you are a failure as a country. We will see how we will achieve that.”

The minister also said in the next budget, government will also have to pay out between K17 billion and K20 billion towards the national pension scheme for retirees.

Gondwe also clarified that the absolute value of the budget could be K900 billion or below and said no one, including President Peter Muntharika, knows the actual figure as of now.

Pre-budget consultations are still going on and, today, Gondwe will be meeting the private sector, representatives of Institute of Chartered Accountants of Malawi (Icam) and captains of industry in Blantyre, among others in Blantyre. n