Stakeholders have urged Minister of Finance and Economic Affairs to prioritise investment in infrastructure development in the Mid- Year Budget Statement to be delivered today, to lure investors and stimulate growth in the economy.
In the statement, the minister is also expected to unveil austerity measures following a directive from President Lazarus Chakwera last week.
The Mid-Year Budget Statement comes at a time when government has accrued a K679.92 billion deficit in the first half of the 2024/25 fiscal year from April to September this year, suggesting that the government is spending more than it earns.
In an interview yesterday, National Planning Commission (NPC) director general Thomas Chataghalala Munthali noted that the austerity measures are necessary to get the economy back on track.
“There are hardly any quick win solutions because our economy has structurally been neglected for a long time. We have to make sacrifices in living austerity measures so we consume less today and invest for tomorrow,” he said.
Malawi Investment and Trade Centre chief executive officer Paul Kwengwere, in a separate interview, said austerity measures were “not necessarily bad”, but stressed that government should ensure that the funds are invested in areas that enhance productivity.
“There has to be investment in manufacturing. So, energy production and infrastructure will be key. Investors require good road networks and reliable sources to come in and invest. If we want to attract investment, then these areas need to be funded,” he said.
The sentiments come on the back of concerns that the low growth and high inflation rates could undermine the implementation of the budget in the medium to short-term and even the Malawi 2063 (MW2063), the country’s long-term development strategy.
Last week, the Reserve Bank of Malawi (RBM) slashed Malawi’s growth forecast by 500 basis points from 2.3 percent projected in May to 1.8 percent, a far cry from the six percent growth forecast required to achieve Malawi’s growth aspirations by the end of the MW2063’s first 10-year implementation plan.
Meanwhile, the Economics Association of Malawi (Ecama) and opposition parties have expressed confidence that the austerity measures would work if the President shows a little more discipline in the implementation of its fiscal consolidation plan than they have done in the past.
In an interview, Ecama acting president Bertha Bangara- Chikadza opined that it is essential that the government implements efficiency measures in public spending, focusing on high-return projects while avoiding waste.
United Democratic Front (UDF) leader in Parliament Ned Poya, in a separate interview, called on the President to cut on foreign travel and limit investments in infrastructure projects.
