By Kingsley Jassi:
Economist Joseph Mwanamveka returns as minister of finance but what he will find this time is a totally different environment to what he found in 2019.
But some experts say he has the right credentials.
Taking over from the late Goodall Gondwe, Mwanamvekha at the time, he inherited a relatively stable economy with inflation at 9.6 percent and remained within a single digit band during his term.
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His first budget, an expansionary K1.7 trillion for 2019-20 fiscal year had the education sector getting 25 percent lion’s share, bringing a record share of local resources allocated to the development budget which got 7.2 percent of domestic revenue, the highest in Mutharika’s term.
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He also framed a budget with the highest revenue jump, at 41.2 percent growth from K969 billion to K1.37 trillion, in a year donor aid declined at the peak of Covid pandemic.
Reacting to the appointment, economist Dalitso Kubalasa said Mwanamvekha’s return is a positive development, given his expertise and track record.
“However, what truly matters now is whether he can rally the essential political and technical backing to not just propose tough reforms but actually incisively implement them,” he said.
At this point, Mwanamvekha takes up fiscal stewardship in a completely different environment to what he found in 2019.
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Now inflation is rising at 28.7 percent and public debt, at over 90 percent of the GDP, has tightened fiscal space with interest cost taking up about 49.2 percent of revenue – much more than 21.9 percent in 2019.
In that tight space, Mwanamvekha is expected to finance importation of food as one of his first assignments, if what President Mutharika said after inauguration on Saturday is to go by.
Mutharika said he would prioritize the food situation, address the fuel supply challenges and unlock donor aid, disclosing that a US government team will be meeting their Malawian counterparts this week.
In his reaction to this appointment, Kubalasa said the public must stay alert on what measures will come, in the face of the delicate situation and the promises.
“There’s a real connection between what’s promised and what’s delivered. Otherwise, the upcoming months will reveal if business unusual is more than just a catchy phrase for the new administration, and whether it can genuinely earn the trust of the citizens,” he said.
Mwanamvekha brings a wealth of experience as an economist and banker, having worked at the Reserve Bank of Malawi and Ministry of Finance as Secretary to the Treasury.
