All eyes on the budget

Chinjoka Gondwe

As Finance Minister Felix Mlusu is this afternoon expected to present and lay before Parliament the 2021/22 national budget, economists and other stakeholders have called for a budget that includes programmes that would help create one million jobs.

The economic experts have also called for adequate funding to the Anti-Corruption Bureau, Judiciary and agriculture sectors and reduction or removal of Value Added Tax (VAT) from essential commodities such as cooking oil, maize, flour and salt.

Mlusu returns to the August House after implementing a troubled 2020/21 budget— characterised by over expenditure, underfunding and intense borrowing— that comes to an end on June 30 2021.


For example, at the end of the first half, total domestic revenue collection amounted to K564.2 billion, six percent shy of the set target, while expenditures were over and above the target of K974.6 billion by 2.5 percent, which necessitated an upward revision of the expected net domestic borrowing requirement from K530.4 billion in the approved 2020/21 fiscal budget to K564.4 billion, or 6.1 percent of gross domestic product (GDP) in the revised budget.

Asked about what Malawians should expect from the new budget, Mlusu said the nitty-gritty of the financial plan would be made known once he presents the same to Parliament.

“Everything will be explained during the budget presentation,” Mlusu said.


Malawi Confederation of Chambers of Commerce and Industry Chief Executive Officer (CEO) Chancellor Kafelapanjira said the private sector expected the national budget to tilt its focus towards Malawi becoming a developmental state.

“[They should also consider] widening the tax base to ensure that all economic players, individuals and corporate, contribute to government coffers. Tax measures to be introduced should support production and not consumption. Accountability for the resources mobilised will be key and a report on how productively the resources for 2020/21 were used will create confidence amongst taxpayers,” Kafelapanjira said.

Institute of Chartered Accountants in Malawi CEO Francis Chinjoka Gondwe said the government should ensure that it is spending within the budgetary framework based on the resource envelope and tighten internal controls over expenditure in the new financial year.

“We look forward to a budget that promises job creation and wealth creation. We look forward to a budget that will support businesses and spur economic growth, mainly in the form of tax incentives. We also want to see the implementation of infrastructure projects”, he said.

Economist Collen Kalua, who is at Central Christian University in Blantyre, said people expected to see how Mlusu would put in place programmes for the creation of one million jobs.

“We should also expect funding for government investments through road construction and lowering of VAT on essential commodities such as sugar, cooking oil and maize flour,” said Kalua, adding that funds poured into agriculture should be increased.

Education expert Limbani Nsapato proposed that the government should expand the revenue base by, among other things, removing tax incentives for multinational co-operations, integrating informal businesses into formal businesses so that more people are taxed and introducing an education levy.

The government should prioritise education and increase the package for the budget while making sure that the allocation is at least six percent of the GDP and not less than 20 percent of the total expenditure,” Nsapato said.

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