Standard Bank Malawi has said the 2024-25 national budget presented by Finance Minister Simplex Chithyola Banda in Parliament on Friday gives hope on the road to achieving the 2063 vision.
In its budget analysis, the bank says its position is based on the enhancement of revenue collection processes, more donor inflow opportunities, rationalisation of expenditures and more focus on economic development.
Standard Bank Chief Executive Philip Madinga has, however, noted in the analysis that success of implementation of the budget, and Malawi’s economic recovery, will hinge on the boldness, courage and commitment by all stakeholders.
Madinga notes that private sector supporting initiatives that drive production and export generation need to be encouraged, and that, on the government side, adherence to its austerity measures, reducing public debt levels and effective fiscal management and discipline would be critical.
According to the bank, total spending, at K6 trillion, has been proportionately reduced by 14 percent, owing to the rationalisation of expenditures with a focus on highly productive sectors.
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It observes that the long-standing challenges in the forex space have been addressed by advancement of export strategies via mega farms, labour export, mining, tourism, enhancement of diaspora remittances and increased donor inflows.
“Recurrent expenses at K4.2 trillion, though accounting for 92 percent of total revenues and 70 percent of total expenditure, have proportionately dropped by 18 percent and 6 percent, respectively.
“Main growth areas with increased opportunities for the private sector include generic goods and services, agriculture, education and health,” Madinga notes.
He was quick to note that although it has only grown by a three percent share of total expenditure, the public debt interest line may have to be closely watched to ensure that it remains within budget.
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“On another positive note, as a proportion of total revenues and total expenditure, development expenditure has gone up by four percent and six percent, respectively, to settle at K1.8 trillion.
“Private sector growth opportunities are in information, transport and infrastructure which has grown by K245 billion (64 percent), health by K131 billion (200 percent), agriculture and rural development by K128 billion (45 percent), trade, industry, and development by K93 billion (103 percent), human capital development by K85 billion (65 percent), institutions and governance by K43 billion (100 percent) and, tourism, energy and natural resources by K1.5 billion (4 percent),” the bank says.
On Friday, Chithyola Banda presented to Parliament the K5.98 trillion budget which has a deficit of about K1.43 trillion.
Recurrent expenditures are projected at K4.21 trillion, representing 22.5 percent of gross domestic product and 70.4 percent of total expenditure. On the other end, development expenditure is pegged at K1.77 trillion.
