Budget to focus on quick wins—minister

Minister of Finance and Economic Affairs Sosten Gwengwe says the 2023/24 National Budget will focus on quick wins in sectors that can generate wealth, create jobs and entrench food security.

Speaking yesterday in Blantyre during the first 2023/24 Pre-Budget Consultation Meeting, the minister said Treasury will also allocate resources to retire the country’s public debt currently at K7.3 trillion and enable government to sufficiently support social sectors.

Said Gwengwe: “In terms of the preliminary budget processes, government has set out the macroeconomic framework for the 2023/24 Budget that looks at the macroeconomic targets such as fiscal and monetary measures and the debt sustainability targets to be achieved by the end of the fiscal year.

“This follows the agreement with the International Monetary Fund on Rapid Credit Facility arrangement as technical discussions for an Extended Credit Facility programme continue.”

He said Treasury will ensure that the fiscal plan is also aligned to Malawi 2063, the country’s long-term development plan and its first 10-year implementation plan.

Gwengwe said the budget remains an important tool in fostering economic prosperity and eradicating poverty, especially in times like these when the economy is experiencing external challenges.

Treasury figures show that 97 percent of the budget resources go towards statutory expenses, leaving three percent for other sectors such as health, education and agriculture.

But Gwengwe said Treasury is funding these critical sectors with borrowed funds, observing that in this financial year, Treasury borrowed K800 billion to fund its budgetary operations.

In his presentation, Institute of Chartered Accountants in Malawi acting chief executive officer Charles Chimpeni urged Treasury to consider broadening the tax base to accommodate a more balanced fiscal plan.

He said: “Strengthening the taxation of the informal sector through aggressive awareness and registration, especially on presumptive tax.

“Engage the local government infrastructure to implement informal sector taxation. Build institutional capacity in revenue collection at local government level.”

Gwengwe is expected to conduct similar pre-budget consutations in Lilongwe tomorrow and Mzuzu on Friday.

In an interview with The Nation on Sunday, former minister of Finance Joseph Mwanamvekha said public debit, energy and forex crisis and fiscal deficit are key issues that need to be addressed in the next budget.

On her part, International Monetary Fund resident representative Farayi Gwenhamo said given the need to restore sustainability of the country’s debt, the budget plan for 2023/24 financial year should ensure that spending is prudent.