The country’s development partners, local experts have described the K1.731 trillion 2019/20 National Budget as developmental, saying government has focused on key areas that need urgent attention to spur socio-economic growth and alleviate poverty.
Minister of Finance, Economic Planning and Development Joseph Mwanamvekha presented the budget statement in Parliament yesterday, which he described as pro-growth.
Setting the ball rolling, International Monetary Fund (IMF) resident representative to Malawi FarayiGwenhamo said they will scrutinise the budget further in the coming days.
In line with the Extended Credit Facility (ECF), she said the IMF mission will be arriving in the country today and will look at the status of the programme and its related targets.
“I should say that there are some key highlights of the budget that we welcome, particularly the minister’s focus on debt sustainability, this is really critical. We also welcome the focus on growth as Malawi badly needs growth given the social issues that the government has to address,” said Gwenhamo.
US Ambassador to Malawi Robert Scott said he would be commenting further after analysing the figures, but noted that Parliament will break into committees to scrutinise the budget.
He said: “This is a positive process to allow parliamentarians to scrutinise where the money is going and dissect policies of the government in the budget for reality check. We are delighted that our focus areas have been highlighted in the budget such as health that has a 12 percent increase, education sector where we are in the process of building 250 secondary schools.”
On his part, Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe described the budget as balanced, observing that some issues that were suggested during consultations have been taken on board.
He said: “It is a balanced budget, it still has a deficit but a smaller one which is good. We are pleased with the investment into the energy sector and other productive areas as well as the removal of some taxes on certain areas of production.
“The budget figures have been determined based on growth areas as per growth domestic product [GDP] of five percent in 2019 and seven percent in 2020. However, the assumptions are based on the performance of the productive sectors.”
Malawi Economic Justice Network (Mejn) executive director Grace Kumchulesi said the assumptions in the fiscal plan are realistic in terms of the projected inflation rate, GDP, interest and exchange rates.
She, however, expressed concern that the budget is silent on tackling issues of population growth which remains one of the serious issues for Malawi as it weighs down the much-needed gains.
Bankers Association of Malawi (BAM) president Kwanele Ngwenya, who is also NBS Bank plc chief executive officer, described the budget as well-balanced, saying some of the recommendations have been considered, citing roads infrastructure, introduction of tax incentives as well as removing of taxes on some of the imported equipment and materials.
National Planning Commission (NPC) director general Thomas Munthali said he acknowledge that the minister has been in an awkward position after coming from an election year which had a lot of promises.
He said the minister has tried hard by focusing on production and growth, especially on infrastructure, power generation as well as import substitution.
Said Munthali: “Moving forward, it could be important to focus on a few strategic areas. He has mentioned a number of roads if we could just, for instance, concentrate on three strategic roads. We could finish all of those within the budget time-frame instead of having those projects running for five years.
“It is a good budget that is focusing on investment oriented front.