The Malawi Economic Justice Network (Mejn) has welcomed intended fiscal adjustments to the 2016/17 National Budget and advised government to focus on priorities that matter most for Malawians.
Minister of Finance, Economic Planning and Development Goodall Gondwe told Parliament last week that government will need to make spending cuts in response to the loss in donor aid budget support.
Gondwe has since revised downwards total expenditure from K1 149.2 billion to K1 129.4 billion.
In an interview, Mejn executive director Dalisto Kubalasa said any adjustments and spending cuts being proposed during the budget review should seriously take into consideration investment in human capital development.
“Let’s endavour to be honest and realistic as we crack down on fiscal indiscipline by bringing back the integrity into the budget implementation process as we make the most of the resources on hand.
“Using the domestic resources mobilised as well as the foreign financed loans and grants, we can always invest towards a better and sustainable human capital development including education, health and entrepreneurship inspite of all else,” said Kubalasa.
He explained that the implementation can be done by systematically targeting and integrating the young population of Malawi, which has great potential and can be a productive workforce.
“If no meaningful investment in human capital and entrepreneurial development is made for this group now, as a nation, we can be sure that poverty will continue to be transferred from one generation to the next,” said Kubalasa.
In a separate interview, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira commended government for the fiscal adjustments which he hoped will reflect the new realities.
“A budget whose assumptions do not hold anymore needs revision. So it is commendable that government saw it fit to revise it. You will recall that government assumed that the economy would grow by 5.9 percent in real terms and by 24 percent in nominal terms, and that inflation would average 17.4 percent during the year. These targets have been missed and, therefore, changes must be made accordingly to reflect the new realities.
Kaferapanjira said at the time Gondwe pronounced those assumptions, the private sector and other professionals, what was his basis?
“Why did he believe that all of a sudden things would change? One concern of donors has of course been governance and we have seen very little progress in this arena,” he said.