Economists have said discipline in budget implementation will be critical to achieving fiscal objectives outlined in the Mid-Year Budget Review Statement presented in Parliament yesterday.
In their reactions to the statement, the economists warned that the country’s economic woes risk worsening if Capital Hill fails to implement production and export enhancing measures.
Minister of Finance and Economic Affairs Simplex Chithyola Banda outlined measures that seek to spur production with agriculture, tourism and mining as the key focus areas.
In an interview after attending the presentation in Parliament yesterday, National Planning Commission (NPC) director general Thomas Chataghalala Munthali said he was impressed with the budget statement, but was coy on its thorough implementation.
He said: “What is exciting is how we invigorate the production side. Almost all the outlined areas that the minister was talking about, if followed through, can improve the economy.
“At the end of the day, if we do not follow through the supply side, the production sectors, this alignment will be meaningless.”
NPC is a government agency charged with shaping the nation’s development through the Malawi 2063 whose key pillars also hinge on increasing productivity, exports and industrialisation to turn the country into a middle-income economy by 2063.
Munthali said government needs to support its ministries, departments and agencies (MDAs) in implementing what has been outlined in the budget.
He said: “Oftentimes, the minister and the President come up with measures such as these, but the MDAs are not followed through or not supported enough.
“The ministries of Agriculture, Tourism and Mining need to be supported a lot more so that they can deliver the measures that we have put in there.”
Measures to boost the economy include introduction of Golden Visa Programme, a residence-by-investment initiative that allows high net-worth individuals to obtain residency or even citizenship in the country.
Said the minister: “Main areas of investment identified for this programme include the mega farms in agriculture, the hotels sector under tourism, and indeed any other area of interest to the investors.
“Under a Golden Visa Programme and in the next five years, the target is to issue out 10 000 visas to investors, which in turn can fetch about $2 billion.”
He said the country was also seeking government-to-government deals to facilitate labour exports targeting 10 000 to 15 000 employees over the next five years with total inflows estimated at around $3.6 billion.
The other initiative, he said, was generating foreign exchange through diaspora engagement to encourage Malawians living abroad to invest back home.
In his reaction, Mzuzu-based economist Christopher Mbukwa doubted the workability of such dealsm especially where a host country would demand 5 000 job seekers.
On the diaspora initiative, the economist said it was workable: “I have personally seen it work in Ethiopia where you can literally see skyscrapers built by Ethiopians in diaspora.”
In a separate interview, economist Milward Tobias said the country needs to create a conducive environment for investment.
He cited foreign exchange shortages and corruption as elements that discouraged foreign investment.
Tobias has expressed interest to contest as a presidential candidate in the 2025 General Election.