By Cathy Maulidi:
Minister of Finance Simplex Chithyola Banda’s budget has attracted mixed reaction from various quarters.
The opposition Democratic Progressive Party (DPP) has described it as “a dead on arrival budget”.
“This is a deceitful and hypocritical budget. Most of the assumptions that have been made in the budget are not achievable and will not be achieved,” the party’s spokesperson on finance, Joseph Mwanamvekha, said.
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One example, according to Mwanamvekha, is the revenue that government plans to generate.
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“If they are failing to collect the revenue in the current budget and the deficit in the current budget continues to grow, how can they raise almost K6 trillion now?” Wondered Mwanamvekha.
Mwanamvekha said the budget projections are impossible and that government has overestimated on revenue.
“Even if you look at the budget deficit itself, it is too huge to the extent that it will suffocate the private sector, meaning that government will continue to be a big borrower domestically from the commercial banks thereby suffocating the private sector and small scale businesses who won’t be able to borrow because they will be crowded out by the government.
“So, it’s an impossible budget. They are deceiving Malawians; they are being hypocritical for people to be saying they will do a lot of projects which is not possible because as we speak now they have not even finished even a single project they started in the previous budget,” Mwanamvekha added.
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Executive Director for Malawi Local Government Association (malga) Executive Director Hadrod Mkandawire said the budget statement is not inspiring on fiscal devolution front.
“It is yet another missed opportunity for the government to entrench fiscal devolution. Besides the World Bank funded projects, there is no meaningful development funding for local development from the tax payers.
“You can use CDF as a benchmark for local development because it is in the public domain that CDF is a political fund camouflaged as local development fund. It is also regrettable that the Government continues to overlook our plea for the bailout package for the local government authorities,” Mkandawire said.
National Planning Commission (NPC) Director General Thomas Munthali said the budget has sent a signal to both state and non-state actors on building foundations for sustainable wealth creation.
“Unlike the previous budgets that had to focus on supporting the battered livelihoods and rehabilitation efforts due to exogenous shocks, this budget sends a ‘serious’ signal to both state and non-state actors that the Government wants Malawi to create wealth and be sereliant at all levels,” Munthali said.
Youth and Society (Yas) Executive Director Charles Kajoloweka said the budget has answered some of the issues the youth raised in their submission to the treasury.
“We requested an increase to the allocation to the loans board so that no student drops out due to lack of fees. Our call was K30 billion allocation but the ministry has allocated K28 billion which is a positive response in our view and what we will be doing in the next engagements is to lobby for further K2 billion to ensure that no students drops out of school,” Kajoloweka said.
One of the country’s development partners, European Union through its ambassador to Malawi Rune Skinnebach indicated implementation as key to the success of the budget.
“This is a budget which will be an exciting one. It’s a budget that is subject to many sorts of pressures. This is because Malawi has suffered a lot during the past years and it will have to remedy some of the suffering. On the other hand is the condition from the donors to keep the budget on track for Malawi to keep on enjoying the support from donors.
“This on paper seems to be honored but one thing is on paper and the other is reality. We are approaching elections and we know the political pressure that would be there. So now they have shown enormous courage in defining the plan and I hope they have the same courage to implement it,” Skinnebach said.
