‘Good, but you can do better’

Reactions to the 2024/25 national budget statement suggest that the Minister of Finance and Economic Affairs Simplex Chithyola Banda did a good job but can do better next time.

In an interview at Parliament yesterday National Planning Commission (NPC) diredtor general Thomas Munthali said he was excited with the proposed financial blueprint for its alignment to the President’s State of the Nation Address (Sona), which was Malawi2063-focused.

He said: “What has been exciting with the budget is that it seems to talk very well to the Sona.  The minister focused on the language of the President. The Sona was wealth creation-centred and Malawi2063-centric, so was the budget statement.”

His praise on one side, Munthali is worried that the policy statement may be progressive but implementation could become a challenge. He said the Minister of Finance and Economic Affairs and, indeed, the Executive in general, have a daunting task to follow through with ministries, departments and agencies that resources allocated for developmental activities are used for the intended purposes.

Munthali is also disappointed with the too many road projects been lined up—suggesting that this needed proper focus.

He observed: “In future government needs to focus on few economically charged infrastructure projects. You cannot have roads constructed all over the country; it is unlikely that you can finish them on time. There are cost implications to this. We needed proper focus and prioritisation in line with available resources.”

The minister, in the statement, listed at least 13 road projects as earmarked for construction in the next budget—a decision which attracted a round of applause especially from government benches.

From other lenses, this would be seen as an election campaign strategy as history has shown that a year before elections, government is in the habit of launching more infrastructure development.

This comes on top of many delayed road projects including rehabilitation of the M1 whose funding was made available in 2019 but five years later, the project remains a song.

Governance commentator, who is also Youth and Society executive director Charles Kajoloweka, said he observed with satisfaction the allocation of K28 billion towards the loans board as this will accord more needy students access to higher education. He said while he has information that the board needs about K30 billion to reach out to eligible students, the allocated funds were encouraging and they will lobby the minister to push it to the required amount.

Kajoloweka also heaped praise on government for raising the tax-free bracket from K100 000 to K150 000. He, however, said K200 000 would have been ideal considering the current economic realities.

Said Kajoloweka: “What we see as missing is lack of a clear agenda on job creation. Basically, there is none. Again, if you look at the youth internship programme, government wants to recruit 3 000, but we thought there would be a revision of the upkeep otherwise K80 000 is not enough considering the devaluation and other economic factors.”

The Malawi Local Government Association (Malga) finds the budget statement uninspiring, especially on fiscal devolution.

Malga executive director Hadrod Mkandawire, in a written response, said this is yet another missed opportunity for the government to entrench fiscal devolution.

Even the doubling of the Constituency Development Fund from K100 million to K200 million does not persuade Malga to look at the budget positively.

“Besides the World Bank Gesd-funded projects, there is no meaningful development funding for local development from the taxpayers. You can use CDF as a benchmark for local development because it is in the public domain that CDF is a political fund camouflaged as local development fund,” argued Mkandawire who blamed Capital Hill for overlooking their plea for a bailout package for councils.

In a written response, Scottish-based economist Velli Nyirongo described the budget as a mixed bag which presents both positives and areas of concern. While heralding government for an increase in development budget of up to 30 percent of the total budget, the economist is worried with borrowing to fix the deficit.