MCP, DPP differ on budget

Malawi’s major opposition political parties, MCP and DPP, have differed in their assessments of the budget unveiled in Parliament on Friday, a reflection more of the politics of the last two months than the resultant economics after the death of Bingu wa Mutharika.

While MCP president John Tembo described the national fiscal blueprint as a source of hope for Malawians, DPP first vice-president and former finance minister Goodall Gondwe argued that it is a complicated budget which does not consider the welfare of ordinary citizens.

Said Tembo: “Overall, the budget gives some hope. It is a budget coming while the country is in very difficult circumstances when things were really bad, but I think it will filter through to have some impact on the poor people.

“For the village people, there are bits and pieces here and there for them. It will bring relief. It is also encouraging that they have removed some excise duties and value-added tax. They have also been bold enough to announce a reduction in the prices of bread; people will be happy on that.”

The MCP leader, who complained that Minister of Finance Ken Lipenga was a little faster in the delivery of his statement for him to pick some details, said his only worry is the decision to embed the motor vehicle licence into the fuel price.

‘Budget needs careful implementation’

Gondwe, on the other hand, said the budget requires “very careful handling in its implementation”, especially as it is coming at a time when inflation is at its highest since 2004.

“It is a very complicated budget to implement,” he said.

He said going by the figures and in relation to the current inflation, even other recurrent transaction (ORT), is less than last year’s figures.

“This means that it will be difficult to get the same goods and services. They have to be careful on that,” said Gondwe.

He added: “I don’t think for this time they had in mind what would benefit Malawians apart from the World Bank funding that which will go to the people through LDF [Local development Fund]. It seems the budget was more concerned with business tax changes and reviews with the aim of rejuvenating businesses.”

Gondwe argued that even the announcement on the reduction of bread prices is nothing for ordinary people as “not many people eat bread.”

“He [Lipenga] was cheating by telling the bread makers to instantly reduce the price of bread, but I would not expect them to reduce the prices since they will also see it as an opportunity to make profits,” he said.

Lipenga, who called his budget an “austerity budget”, announced several tax cuts, especially touching on taxes introduced last year when government moved to the zero-deficit budget.