Minister dared on budget priorities

Stakeholders to the last leg of the 2024/25 Pre-Budget Consultation meetings in Mzuzu have asked Minister of Finance and Economic Affairs Simplex Chithyola Banda to prioritise production in the next financial plan.

During the meeting yesterday, the stakeholders said more funds should be allocated to grow human capital, health, education, agriculture and infrastructure sectors. They also called for timely and improved funding towards the development budget in local government authorities.

In his contribution, CCAP Synod of Livingstonia Church and Society Programme coordinator the Reverend McBowman Mulagha revived calls to exit the Affordable Inputs Programme (AIP).

He said AIP has overtime proved unsustainable, highly politicised and be-devilled with corruption.

Said Mulagha: “The Minister of Finance has said this budget is based on recovery, but most policies are not for production such as the budget on AIP which is marred with corruption and wastage.

“Therefore, I propose that in the next budget, government redirects AIP resources to mega farms programmes and agricultural extension services.”

He also implored government to continue funding the improvement of power generation and supply in the country.

“The country’s capacity must reach 1 000 megawatts by 2025 if we are indeed to see production going up. This will ensure more production in our industries and operationalise mining and make development agreements public,” said Mulagha.

Chipunga Farms managing director Bernhard Schwarz shared the sentiments on power generation, saying as a coffee producer he relies on diesel generators to produce export products as there are frequent blackouts in the Northern Region.

In his contribution, Mzuzu University Vice-Chancellor Professor Wales Singini said through the 2024/25 National Budget, government must invest a lot in education.

He said: “Malawi was failing to reach the 20 percent threshold in allocating resources as outlined by the Global Platform on Education.”

On human capital development, Singini said most universities have less than 35 percent members of staff with PhDs and less than 10 percent at professorial level.

He said: “These are lower than the minimum requirements, thereby affecting quality delivery and global competitiveness.

“This has the potential to affect contribution to enabler five [human capital development] of Malawi 2063. There is need to invest in capacity building.”

Singini noted that while there is a directive to increase access by 10 percent every year, there is stagnation on resources to support recruitment of new staff.

He said this has led to violation of the minimum standard ratio for staff to students, soaring at 1:34 against the recommended 1:18.

Singini said the current wage bills are higher than the Other Recurrent Transactions (ORT), which is being complemented by universities’ own generated resources.

He suggested that subventions should be based on actual cost of training and number of students enrolled.

Making his contribution, Malawi Local Government Association executive director Hardrod Mkandawire bemoaned failure by the central government to disburse resources to councils in time, saying this has negatively affected the implementation of programmes at council level.

He called on the minister to increase funding to the District Development Fund and Infrastructure Development Fund to be used for rehabilitation of feeder roads and bridges destroyed by Cyclone Freddy.

Said Mkandawire: “Provide support to district-based business resource centers to enable local producers and investors to access information investment opportunities and markets.

“Government should comply with the law and policy in sharing ceded revenue with local governments. These include gambling/casino, motor registration, industrial registration, toll fees. It should also consider leaving local taxes such as forest fees, and fish net fees.”

He said, local government authorities owe service providers about K17 billion and called on the Treasury to consider a long-term bailout package.

In his reaction, Chithyola Banda agreed on the need to focus on economic diversification for the country to generate enough to finance infrastructure development.

“We will invest in human capital development, but also we are looking at diaspora engagement, carbon marketing, and labour exports,” he said.

Besides agriculture, the minister said there will be a need to enhance growth in other sectors like banking and insurance, manufacturing, mining and tourism.

During similar sessions in Blantyre and Lilongwe last week, stakeholders also dared government to balance priorities to sustain economic targets.

The minister said the 2024/25 fiscal plan will focus on recovery and cushioning the economy from the effects of policy changes the government has implemented.

The next budget, to roll out from April 1, comes almost a year to the September 16 2025 General Elections and stakeholders have expressed fear that election spending to woo voters could derail economic gains. It also comes at a time the country’s economy is grappling with a number of challenges which resulted in a lot of imbalances and threatened the implementation of long-term development agenda.