UTM Party says Minister of Finance and Economic Affairs Simplex Chithyola Banda’s Mid-Year Budget Review Statement has failed to offer solutions to current economic challenges facing Malawians.
In a statement issued yesterday in response to the budget statement tabled in Parliament on December 4, UTM Party director of finance and economic affairs Symon Mwayang’ana said the assumptions in the budget were unrealistic and likely to worsen public debt, currently at just over 80 percent of gross domestic product (GDP).
He said the unrealistic projections on grants, soaring public debt, continued Executive extravagance and the deadlock on the International Monetary Fund (IMF) Extended Credit Facility (ECF) pointed to a budget short of addressing the country’s economic woes.
Said Mwayang’ana: “UTM considers the 375 percent rise in grants from the mid-year outturn of K223 trillion to K1 trillion in the second half of the year as simply unrealistic and untenable.
“This may simply lead to further budget underperformances, especially on foreign financed projects, which already underperformed by over 100 percent in the first half of the financial year.”
UTM Party also described increased budget allocation to State residences and the Office of the President and Cabinet (OPC) from K24 billion to K34 billion and from K34 billion to K39 billion respectively as extravagant.
Further reads the statement: “Fertiliser, food, fuel, forex and prices for all other basic necessities are simply unaffordable for many, plunging households into severe hardships. The budget fails to address this crisis or propose viable interventions.”
In his earlier response to the Mid-Year Budget Review Statement in Parliament on Monday, Democratic Progressive Party spokesperson on finance Joseph Mwananvekha faulted excessive government spending at the expense of development projects.
In the Mid-Year Budget Review Statement, Chithyola-Banda revised the 2024/25 National Budget upward from K5.9 trillion to K6.04 trillion.
The revision was due to an increase in recurrent expenditure from K4.21 trillion to K4.6 trillion. But, the reviewed budget saw a decline in development expenditure from K1.77 trillion to K1.58 trillion.
On the other hand, the minister justified the reduction in the development budget as due to delays in the starting of some projects in the first half of the fiscal year.
