Minister of Finance and Economic Affairs Simplex Chithyola- Banda has a huge task to manage the economy in an election year. However, assurances that currently there is no deficit in the election budget are pleasing. Chithyola- Banda needs to be commended for ring-fencing the election budget and making the resources fully available.
Treasury has an obligation to release funds to Malawi Electoral Commission (MEC) so that elections do not fail. If the first round of voting does not produce an outright winner, the voting will go into the second round. This will require more money.
Chithyola-Banda has an important role to ensure that the economy stays on course. The minister will need to play a strict role as gate keeper in ensuring that the budget does not go off track. While an election is happening, other equally important budget functions should not be abandoned.
The Minister of Finance and Economic Affairs will have to ensure that the Treasury should not condone unnecessary expenditure. These include funds requested and disguised as expenses to cover development meetings.
Chithyola-Banda and Treasury need to tame the rising public debt. Government borrowing has exceeded limits such that total public debts are 86 percent of gross domestic product (GDP). The implication is that the government is spending more money on debt repayments than the money spent on national development.
Public debt repayments are overshadowing education sector budgets, reducing health sector spending, and overcrowding intentions to spend in economic productivity areas outlined under the Malawi 2063. Therefore, election expenditures need to be managed well to avoid complicating the situation.
The economy is also faced with high inflation at about 27 percent. This is associated with a sharp rise in the cost of living. Prices of goods and services have skyrocketed. Election over expenditures and cash handouts for campaigns have the effect of releasing bad money into the economy.
Chithyola-Banda has the additional role to advise the Reserve Bank of Malawi (RBM) against any temptations to print excess money in the event of political pressure. During the election year, there is need to maintain a healthy balance between fiscal policy and monetary policy.
Election is an opportunity to transform the country into a largely producing and exporting nation. Political manifestos should stress their strategies for supporting strong fiscal policy. Manifestos must be clear on actions for embracing monetary policy stance that will lead to reduction of inflation, decline in interest rates, and stimulating local and foreign businesses.
Chithyola-Banda is managing a budget that is backed with low foreign exchange reserves. This is on account of the wide trade deficit where Malawi’s imports are perpetually higher than exports. The Ministry of Finance and entire government machinery should avoid a situation where people go to the polls on September 16 amidst long fuel queues. Prudent management of the economy will help to prevent dissatisfaction among voters because of rising prices of maize. Voters should no longer be subjected to queuing for basic commodities such as sugar which is locally produced.
Chithyola-Banda will fail in his role as Minister of Finance and Economic Affairs if other government departments work with the business-as-usual mentality. The public service is characterised by corruption, looting, and mismanagement of funds. Bad procurement and construction of shoddy infrastructure have tainted the image of government.
The September 16 election is an opportunity to correct these ills and help make the Ministry of Finance and Economic Affairs work effectively. The election is an opportunity to recover, develop, and protect the economy. The September 16 poll is the golden moment to transform budgets and revamp the economy in the spirit of One Malawi, One people, and One Nation as persistently emphasised by Chithyola-Banda.
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