Finance Minister presents national budget
By Taonga Sabola and Deogratius M’mana:
Finance Minister Sosten Gwengwe on Thursday afternoon presented the 2023/24 National Budget at Parliament Building in Lilongwe.
The 2023/24 national budget is pegged at K3.87 trillion, the Finance Minister said.
He says overall deficit is seen at K1.32 trillion.
To address the deficit, government will borrow K1.19 trillion from the domestic front and the rest will be foreign borrowing.
Gwengwe has announced an 8 percent salary increment and introduction of a transport allowance for civil servants.
Government has also doubled the honorarium of all chiefs under the payroll.
Paramount chiefs will be allowed to import at least one vehicle duty-free.
Government has set aside K8.9 billion for recruitment of primary school teachers.
Interest repayment on government debt is seen at K986 billion.
- Key budget allocations
The Education and Skills Development Sector has been allocated K603.36 billion. According to Gwengwe, government plans to start constructing six schools of excellence in the financial year.
The Agricultural Sector has been allocated K455.1 billion meant for wages and salaries, AIP and other projects. K117 billion has been allocated towards AIP.
Government has allocated K330.18 billion to the Health Sector. The funds will cater for, among others, construction of Cancer Centre and 55 health posts.
Energy, Industry and Tourism has K51.83 billion for wages and salaries as well as energy projects like Mpatamanga Hydro Electric Power Project.
Ministry of Trade has been allocated K1 billion to coordinate anti-smuggling efforts.
Government has allocated resources towards mineral laboratories to ensure that testing of minerals is done in Malawi.
K488 billion has been allocated towards local councils. The funds will go towards recurrent and development budgets.
The funds include K19.3 billion for Constituency Development Fund.
Government has also moved to encourage production of electric vehicles by incentivising importation of materials used for production of electric vehicles in Malawi.
It has also removed taxes on the importation of electric motor vehicles and electrical vehicle charging equipment.
- Attendance on the day
Attendance of both parliamentarians and other stakeholders was not impressive, with many seats, especially on the opposition side and galleries for other stakeholders, vacant.
Among those from the diplomatic community that were in attendance were the European Union Ambassador Rune Skinnebach, Japanese Head of Economic Cooperation Shima Naoyuki and United Nations Resident Coordinator in Malawi Rebecca Adda-Dontoh.
- Reflecting on the previous 2022-2023 budget
According to Gwengwe, Malawi’s economy grew by 1.2 percent, affected by intermittent power supply, among others.
Gwengwe says the local economy is expected to grow by 2.7 percent in 2023, buoyed by an anticipated strong performance in agriculture, among others.
Gwengwe says Malawi’s debt stock was seen at K7.9 trillion as at the end of December 2022.
“The pace of growth of public debt is unsustainable and must be checked,” Gwengwe pointed out.
The Finance Minister says government has embarked on a debt restructuring strategy to address the situation.
Gwengwe says the 20222/23 used a total of K3.04 trillion against a planned K2.85 trillion
According to Gwengwe, the jump in total expenditure for the year resulted in a budget deficit of around K1.01trillion.
Among others, Gwengwe says the jump in the total expenditure was due to, among other things, a higher-than-planned salary adjustment.
Gwengwe has cited a number of road and hospital projects which the government embarked on during the year.
According to Gwengwe, many road projects mentioned have registered completion rates of above 60 percent.
In the rail subsector, Gwengwe said the rehabilitation of the Bangula-Marka stretch is at 17 percent completion rate.
Gwengwe mentioned some projects he says were started in 2022/23, a development that did not pleased some opposition lawmakers who accused Gwengwe of wasting time.
But Gwengwe said he needs to report to Malawians how government used every penny of their taxes.