By Cathy Maulidi:
Opposition Democractic Progressive Party (DPP) and the United Democratic Front (UDF) have described as unrealistic the K8.05 trillion budget which Minister of Finance Simplex Chithyola Banda presented in Parliament Friday.
DPP spokesperson on finance matter, Joseph Mwanamvekha, labeled it as a campaign budget.
“It is not pro-growth, it is inflationary and finally it is very consumptive.
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“I’m saying this because they are projecting that GDP will grow to 3.4 percent this coming year. It is not possible to grow it to 3.4 between now and December given the shortage of foreign exchange,” Mwanamvekha said.
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He said many companies in Malawi currently are struggling to to produce while others are shutting down as they cannot import raw material due to shortage of forex.
“So the 3.4 percent is not achievable because the country is not producing as much as we were expected to,” he said.
On inflation coming down from 35 percent to 23.1 percent, Mwanamvekha described this as impossible.
“It is unlikely to happen. We anticipate that this month’s inflation report will show a figure exceeding 35 percent, primarily due to the increased price of maize. Maize holds a significant weight in the Consumer Price Index, which is used to measure inflation. Therefore, that expectation is not realistic.” Mwanamvekha said.
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On the budget not being developmental and not pro-growth, Mwanamvekha said the funds allocated for development are not enough as compared to the piles of development projects in the budget.
“Out of the total budget, only K2 trillion has gone to development, meaning that what has been allocated to the development budget is less than 25 percent of the budget. It is not a developmental budget. Actually I was wondering when people were cheering after the minister said that.
“Too many road projects and other developments. I don’t think the K2 trillion will be able to achieve all that considering the exorbitant prices we have now,” Mwanamvekha said.
UDF’s spokesperson on matters of finance Ismail Mkumba wondered where government plans to get the money for all the road projects highlighted in the budget.
“The budget sounds too good. Many of those road projects will not be done. Trust me,” Mkumba said.
Mkumba said government has included many road projects in the budget just to woo voter ahead of the elections.
“Again the removal of VAT on second-hand clothes, bread and others has been done just to make some groups of people happy ahead of the elections. This is not good for our country’s economic growth as kaunjika imports drain a lot of forex. This is worrisome,” he said.
Parliament has since adjourned for clusters where members of Parliament will scrutinise the budget for two weeks.
