‘Govt should address economic situation’

Parliament convenes on May 18 in Lilongwe for the 2012/2013 national budget. This will be President Joyce Banda’s first national budget. Expectations are high that the new budget brings hope to Malawians. This is in view of the fact that the current budget had subjected the public to economic woes through its zero-deficit budget (ZDB) approach. GEORGE MHANGO speaks to Sane Zuka, a development economist from the University of Malawi’s Polytechnic, on these issues.

Q: Is the call for the national budget session of Parliament timely?

 

A: It is timely in terms of routine requirement. However, it is not clear as to whether we are having DPP government development priority or PP government development priority. The point to this end is the maintenance of the Minister of Finance Ken Lipenga. I wonder if there is going to be much considered changes, though continuity is important.

Q:What policies are you expecting from this session considering the economic challenges Malawi is facing?

 

A: The policies should focus on increasing local consumption so as to stimulate local industry. To this end, policies that increase incomes of low income groups are welcome, such as agriculture, infrastructure development, manufacturing and education matters a lot.

Q: What was bad in the 2011/2012 budget that needs to be worked on by the new administration?

 

A: During the previous administration, tax regimes were exorbitant and need to be reworked. High taxes are in the long run not only a threat to the economy, but unsustainable.

Q: Some have argued that the new budget should get rid of taxes that were introduced to cushion the zero-deficit budget. Is this practical?

 

A: Very practical. I am saying this because government should strive to win back the trust of development partners to support the budget. This will cushion the country from forex shortages and secondly, again, low tax will translate into more aggregate consumption and the difference between high taxes and low taxes might be taken care of in more employment created due to increased consumption.

Q: Which government ministries and departments should be given much priority in terms of budget allocation?

 

A: Agriculture, Education, Justice, Lands and Housing, Health, Mining and Energy, Local Government especially decentralised government management system.

Q: And what developments should get priority in the 2012/2013 budget?

 

A: The President Joyce Banda government should aim at stabilising the economy in terms of forex and fuel. It should also focus on increasing citizen participation in the economy and improving transport network. More important, the government should find a strategy to address rampant unemployment.

Q: What is your advice on budget formulation regarding PAYE and salary hike for civil servants?

 

A: There is need for the current government to reduce PAYE for low income groups and aim at increasing dispensable income for the workers.

Q: Any last comments?

 

A: Government should aim at performing, and getting big politicians alone is no solution in this era. What people need is performance—address the economic situation.