Mixed expectations for 2020/21 budget
Treasury has started soliciting views to be incorporated in the 2020/21 National Budget as key stakeholders express mixed expectations.
This comes as the local economy is still faced with numerous challenges including possible effects of the novel Covid-19 pandemic.
Commentators say the next budget would have to be formulated in such a way that it helps fixing Malawi’s volatile economy, where businesses remain subdued and most sectors are not ticking, astounded by myriad woes emerging out of the May 21 2019 elections disputes, and long-term inconsistencies in policy direction.
Fiscal pressure, unpredictability of budget support, procurement hurdles, and poor public finance management are among key risks facing the economy and the next budget’s implementation.
Institute of Chartered Accountants in Malawi (Icam) for instance suggests that the next budget would have to outline a possible recovery plan from exogenous shocks including Covid-19.
“Our expectation is that government will include allocation to fight Covid-19 and also relax some of the taxes to ensure that the business community and employees have something so that they can survive in these difficult times,” Icam Chief Executive Officer, Francis Gondwe said.
In a separate interview, Employers Consultative Association of Malawi president George Khaki said the employers in the country expect the government to channel more resources towards the recovery of the economy.
“The budget should provide for recovery after the Covid-19 because it will have devastating effects on the economy therefore recovery of the economy will be critical especially the sectors which have the potential to kick start the economy,” Khaki said.
He added that the government should focus on decreasing levels of unemployment especially among the youths who are many.
Economics lecturer at the Chancellor College, Ben Kalua the next budget will focus on recovery.
Treasury spokesperson, Williams Banda, said soliciting of views which started on Monday last week and will end on April 30.
“We have received positive response because we have seen a lot of letters trickling.”
“However, upon finalizing getting the views, we will sit down and review and upon reviewing where we need some further clarification, we will be consulting the stakeholders,” Banda said.
The Ministry of Finance is this year soliciting views from stakeholders through written submissions.
Banda said the new arrangement will not jeopardize budget formulation process.