ICAM for strong public finance management
The Institute of Chartered Accountants in Malawi (Icam) has called on government to, among others, strengthen public finance management and control public debt and expenditure if the country is to make progress on budgetary issues.
Icam chief executive officer (CEO) Evelyn Mwapasa said this yesterday in Blantyre when her organisation engaged Minister of Finance, Economic Planning and Development Goodall Gondwe during a pre-budget consultative meeting.
“We have to invest in strengthening public financial management by investing in a competent human resource, those already in the system need to be highly ethical so as to not only avoid another Cashgate, but to win back the confidence of taxpayers and development partners,” she said.
Icam’s suggestions included having appropriate technological systems as well as adequate funding for auditing and checking compliance in public finance management.
Besides strengthening financial management, Icam also asked government to commit itself to development of public infrastructure such as roads, airports and public schools through Public Private Partnerships (PPPs) so as to give confidence to the funding organisations.
Regarding the Farm Input Subsidy Programme (Fisp), Icam called for improvements through agricultural extensions services to beneficiaries as well as engaging in irrigation farming since rain-fed agriculture has proved to be unreliable due to climate change.
According to Mwapasa, high unemployment can be reduced through skills development that can culminate into small-to medium enterprises such as those to be offered by the proposed community technical colleges.
She, however, said the idea needs to be advanced with caution saying: “The issue of community technical colleges needs to be given realistic funding if they are to graduate skilled artisans. The scale of the programme should match with the resources even if it means to scale down to provide for better quality.”
On interest rates, the Icam CEO appealed to government to bring down commercial bank lending rates, currently hovering around 40 percent to around 22 percent as was the case in early 2012.
She then proposed a tax-free threshold increase from the current K20 000 to K40 000 to alleviate the position of low-income people.
In order to increase revenue, Icam recommended that government expands its tax base by bringing in more taxpayers into the net.
However, the issues of bringing in of more taxpayers would depend on suggested tax incentive reviews that aim to promote more investment since some of the taxation conditions are in need of updates, a thing which could be a potential area for government to realise additional tax revenues.
In his remarks, Gondwe assured the meeting of government’s commitment in fiscal matters by admitting that financial accounting is key to everything; hence, the issue of public finance management would be looked into with the seriousness it deserves.
“Our goal is to ensure that there should be no Cashgate again,” he said. n
