Campaign budget

HERE I AM—Gondwe arrives at Parliament

Finance Minister, Goodall Gondwe, Friday tabled a budget that puts government in a dilemma with several expenditure pressure points without a detailed account of how he was going to pay for it.

At K 1.5 trillion, the budget is 13 percent higher than the K 1.1triillion 2017/18 revised budget, representing 22.8 percent of the GDP.

Gondwe said the next financial plan is crafted to spur economic growth and address concerns on the rising cost of living among a majority of Malawians, but was short of words on how Treasury would meet the underlying principles in the budget.


Revenue is projected at K1.2 trillion, representing 23.6 percent of the GDP, of which, K 1.05 trillion will be generated domestically, while the remaining K209 billion, representing 3.9 percent of the GDP will be in a form of grants.

According to Gondwe, the economic goal is founded on common aspirations of Malawians that the country should move out of a group of countries that is considered to be the poorest in the world.

“The underpinning of this budget is a focus on robust economic growth as the main goal of economic management alongside the maintenance of macroeconomic stability for robust, inclusive and sustainable growth,” Gondwe said.


Amid some improvements in some key macro-economic fundamentals, Malawi is still faced with insufficient energy supply, which in turn also undermines its already nascent industrial base.

Gondwe was not clear on solutions to the energy woes, saying, Malawi will see the normal light only after 2021, as it is banking on the interconnector, a mockery to most in private sector.

“The private sector is totally ignored in the budget. Everything points to collection of more monies, and little on how to generate the funds,” Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Chief Executive Officer, Chancellor Kaferapanjira said.

On food, Gondwe said that this season, maize production has dropped by 19.3 percent to 2.8 metric tons, with a sum of K 20 billion set for maize purchases.

He also announced a hike in salaries increasing the government wage bill K392.0 billion representing a 24.3 percent increase over the 2017/18 due to an effected 20 percent and 10 percent salary adjustment for junior senior grades in the public service.

Ironically, government has also almost doubled honorarium for traditional leaders, another expense Gondwe has to find means to finance.

The good news was that he succumbed to pressure to widen the tax-free bracket from K 30,000 to K 35, 000—a move that means only those earning from K36 000 will be taxed Pay as You Earn (Paye) at the flat rate of 30 percent.

To meet the outlined expenditure lines, government is expected to receive K 70 billion direct budget support from the World Bank.

On allocations, the education sector got the lion’s share at K 166 billion. The agriculture sector got K 151 billion, while the Health sector is third on the list with K 86.7 billion.

The allocations, according to Gondwe, reflect the dictates of the MDGS III.

Elections budget is pegged at K33. 5 billion, to be funded entirely by locally generated will be funded entirely by the Malawi government while the farm input subsidy programme towards a million beneficiaries have been allocated K 4.5 billion.

Kaferapanjira said the budget is for traditional leaders not for the private sector growth.

And Malawi Economic Justice Network (Mejn) Executive Director, Dalitso Kubalasa, said Malawians will have to keep figures crossed, saying with the elections coming, the budget should not be politicized.

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