Ministry of Finance, Economic Planning and Development has expressed optimism on the implementation of the Malawi Growth and Development Strategy (MGDS) III with funding from government and donors.
In an interview on Friday, Secretary to the Treasury Ben Botolo said government intends to finance MGDS III—the overarching development strategy—through revenue generated from domestic resources which will be complemented with resources from concessional borrowing.
He said Treasury is banking on the private sector involvement in financing of flagship projects through the Public-Private Partnership (PPP) arrangements.
Said Botolo: “There is quite substantial amount of money coming from the government as well as the development partners as it is the mixture of the two that determine funding and implementation,” he said.
Government has identified five key priority areas in the MGDS III which could spur economic growth due to their impact and interconnectedness to other sectors of the economy.
The five key priority areas were chosen on the basis of their alignment to the United Nations Sustainable Development Goals (SDGs), the African Union Agenda 2063 and the country’s economic and development needs.
The priority areas include agriculture, infrastructure, education, energy and other allied sectors as well as health as a social sector.
Government has also identified flagship projects from the key priority areas which will be targeted for implementation in the next five years to capitalise on the available resources during the implementation period.
In an interview on Tuesday, tax consultant Emmanuel Kaluluma said while it cannot be disputed that the country has survived on its own resources in the past few years with borrowing done to top up, the challenge is on resource mobilisation, which has faced hitches in recent months.
He said: “The challenge that we have at this time is where revenue mobilisation is concerned on the issue with regard to the enforcement of the law, compliance and how the mobilised resources are being used.
“If is the resources that are mobilised in the form of tax are thought to be put to waste, then people will not comply.”
International Monetary Fund (IMF) resident representative Jack Ree said the key to successful implementation of MGDS III is public finance management reform as people would expect their taxes to go into roads construction or provision of drugs in hospitals to bring the best possible outcome.
“On the private sector, there is a strong potential, especially given the low levels of private public partnership types of deals in Malawi which make it a blue ocean.
“However, private sector should be convinced that macroeconomic stability will stick despite the elections next year.”n