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‘Proof of pudding is in the eating’

NSAPATO—Many challenges will remain

BEER—We look forward to debt management plans

By Deogratias Mmana:

Minister of Finance Sosten Gwengwe’s budget has drawn mixed reactions, with chairperson for Parliament’s Budget and Finance Committee Gladys Ganda describing it as fair.

She however said the financial blueprint does not bring anything new to the table as the issues it raised have been raised before but lacked implementation.

Ganda said it was pleasing that the budget targets poor people and is prioritising debt management, local manufacturing, export diversification and import substitution.

She also commended the government for removing tax on cooking oil and for increasing Constituency Development Fund to K100 million.

But she said it was disheartening that the country has a debt of K5 trillion, which she said needs to be reduced.

British High Commissioner to Malawi David Beer said he fully agreed with Gwengwe that fiscal consolidation and managing balance of payments are necessary in the coming year in order to ensure macro stability.

Beer also said he supported government’s steps to manage debt.

“We look forward to seeing the plans on debt management,” Beer said.

The British envoy said he would love to see law enforcement agencies being well funded.

Director of Centre for Research and Consultancy, Milwad Tobias, said the budget balanced the interests of ordinary people and businesses of all sizes.

“The minister has provided a clear thought process about how to turn around the economy,” Tobias said, adding that the budget is also aligned to Malawi 2063 first implementation plan.

He however said for the budget to deliver, controlling officers and other senior officials need to be supportive of the fiscal agenda.

“It is worrying to hear that the reason for under performance of grants is due to slow implementation of the funded projects,” he said, urging the Secretary to the Treasury to crack a whip on under-performing controlling officers.

Consumers Association of Malawi Executive Director John Kapito said what is in the budget has been said before.

He also cautioned on debt management, saying this requires discipline which is always lacking in many government departments.

On cooking oil and tap water tax removal, Kapito said “we are eager to see whether the removal of VAT will translate into price reductions.”

He described as depressing Gwengwe’s admission that inflation will rise to double digits, arguing that the development will trigger high cost of living.

As for the education sector which has received the lion’s share of K462 billion, education analyst and board chairperson for the Civil Society Education Coalition Limbani Nsapato, while welcoming it, said the budget is not sufficient for the sector.

“Many challenges will remain,” he said.

He said the blueprint has not included special needs education, teacher recruitment, operationalisation of compulsory education, Covid-19 and effects of cyclone Ana in affected schools.

Democratic Progressive Party’s spokesperson on Finance, Joseph Mwanamveka, has since hailed Gwengwe for speaking the language that many Malawians wanted to hear, especially on increasing the CDF allocation and removing VAT on cooking oil.

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