Minister of Finance and Economic Affairs Simplex Chithyola Banda has said the 2024-25 national budget will focus on economic recovery and provide cushions against possible effects of recent fiscal and monetary policy stance.
He expressed the sentiments in Blantyre Monday during the first pre-budget consultation meeting.
Banda added that the economy has faced myriad challenges which lead to imbalances and threaten implementation of long-term development plans.
He further said implementation of the Malawi 2063 and its First 10 Year Implementation Plan (MIP- 1) required the government to make tough choices to ensure that the imbalances existing in the economy are addressed.
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“The government has set out the macroeconomic framework for the 2024-25 budget that looks at the macroeconomic targets such as fiscal and monetary policy measures and the debt sustainability targets to be achieved by the end of the fiscal year,” Banda said.
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Different stakeholders including Malawi Confederation of Chambers of Commerce and Industry (MCCCI) and Institute of Chartered Accountants in Malawi (ICAM) made their proposals to be included in the expenditure.
MCCCI proposed measures that would help contain after-effects of the recent devaluation of the Kwacha, revamping the manufacturing sector, reworking on the agriculture sector, and changing policies for banking, finance and insurance sectors to improve the sector and increase penetration.
It also proposes revamping of the transport sector to reduce costs for businesses, and create a conducive environment for the construction and ICT sectors.
Making the presentation, MCCCI Director of Business Development Madalitso Kazembe said if the proposals can be taken into consideration, the economy can change for the better.
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“We have also emphasised that the government should strive to reduce the budget deficit because it is the deficit that forces government to borrow, thereby crowding out the private sector, the main ingredient for economic development,” Kazembe said.
Icam proposed that the government should broaden the tax base, manage public debt, provide tax incentives to industries and improve on tax administration, among others.
Making the presentation, Icam Chief Executive Officer Noel Zigowa said the body also wants the government to increase the Pay As You Earn (PAYE) tax free bracket to K150, 000.
“This is very important because it will cushion Malawians from the current rising cost of living, which has come about due to the 44 percent devaluation and other macroeconomic imbalances,” he said.
