Finance Minister Sosten Gwengwe will be the centre of attraction this afternoon when he presents the 2023-24 national budget in Parliament.
Gwengwe’s biggest task will be to strike a balance between Malawians’ ever-growing needs on one side and a very thin resource envelope on the other, perhaps also bearing in mind the country’s already bloated public debt portfolio.
With the country collecting just enough taxes to pay statutory obligations such as salaries and wages, pensions as well as interest on public debt, the enormity of Gwengwe’s task must be colossal.
Equally interested in the budget will be global institutions such as the International Monetary Fund (IMF) to see how Malawi addresses the issue of budget deficit as the country attempts to graduate from the staff monitored programme to an Upper Credit Tranche (UCT) quality programme, the Extended Credit Facility, by mid this year.
And speaking in a brief interview Wednesday, Gwengwe said all is set for budget presentation.
During his appearance in Parliament on Tuesday, President Lazarus Chakwera indirectly set the tone for the financial blueprint.
Responding to a question from Mangochi Central parliamentarian, Victoria Kingston on what his plans for the lakeshore district are, Chakwera said Malawi needs to mind its spending, saying the country does not have the luxury of abundant resources.
The President said looking at what the country is able to generate, it is basically just paying workers, pensions and debt.
“We need to generate more. If we keep spending what we do not generate, we keep getting deeper and deeper into debt.
“And, so, we have to choose what is first, second and third and move in that order. This is not good news to many people because a lot of people want their particular development item done now. Just now, now, now! And that is not possible,” Chakwera said.
In an interview Wednesday, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Chief Executive Officer Chancellor Kaferapanjira said the private sector has a lot of expectations from the budget.
Among other things, Kaferapanjira said the private sector is hoping that Gwengwe will announce tax incentives for players in the mega farms initiative.
He added that the private sector also expects the Finance Minister to announce the removal of maximum demand tariff on electricity, which has resulted in the ballooning of cost of production as industries are forced to pay the tariff even when they have no power.
To boost the availability of forex in the country, the MCCCI chief said they expect the Finance Minister to announce incentives for partnerships between forex generators and forex users.
“The incentives could be in the form of allowing the partnerships to return 100 percent of the forex generated or, in some cases, 90 percent,” Kaferapanjira said.
He also said government, through the Reserve Bank of Malawi, could announce regulations encouraging such partnerships.
“Such an arrangement has been tried in some countries, including Zimbabwe, and it works,” Kaferapanjira said.
Limbani Nsapato, Edukans Malawi Executive Director, said quality education advocates expect Gwengwe to announce that the share of the education budget will not be less than six percent of gross domestic product and 20 percent of the total budget.
“Within education, prioritise teacher recruitment and promotion and increased salaries. Also prioritise neglected areas of early childhood development, adult literacy, vocational education and special needs education,” Nsapato said.
Malawi Health Equity Network Executive Director George Jobe said he expects Gwengwe to increase the health budget to about 15 percent, with more resources going towards primary health care.
