Sosten Gwengwe tears into Budget Statement
Chairperson of the Budget and Finance Committee of Parliament, Sosten Gwengwe, Wednesday tore into the Mid-Year Budget Statement presented by Finance Minister, Joseph Mwanamvekha, on Friday describing it as a consumption budget.
Among other things, Gwengwe said the budget fails to meet the five objectives it was designed to achieve.
Mwanamvekha said the statement has the objectives of promoting economic growth, job creation, economic empowerment, sustainable debt management and infrastructure development.
Responding to the statement, Gwengwe said it was crucial to assess progress made in implementing the budget on the basis of the five key issues.
“As honourable members debate the budget, the committee is calling upon every member in this House to ask the following questions: Has this budget created jobs, especially for the youth? Has this budget achieved economic growth enough to start alleviating poverty?
“Has this budget deliberately empowered marginalised sections of the society? In other words, is this budget inclusive enough? Has this budget arrested the government’s huge appetite for borrowing and lastly, have we seen infrastructure development that this budget promised?” Gwengwe quried.
He said the current budget allows Malawians to eat today but forgets to prepare for what the country may eat tomorrow.
Gwengwe pointed out that out of the K1.84 trillion to be spent in the budget, almost K1.4 trillion will be spent on emoluments and Other Recurrent Transactions (ORT), leaving only K470 billion for development projects, a thing he said is a red flag for Malawi and future generations.
He said of the K470 billion earmarked for development projects, K333 billion is foreign financed and domestically financed projects amount only to K137 billion which is another red flag.
On economic growth, Gwengwe said the local economy grew by 4 percent in 2018 and 5.1 percent in 2019 which is shy of the 6 percent considered as the minimum growth rate if Malawi is to reduce poverty considering the current levels and population growth.
“The pertinent question this House must be asking is ‘what should Malawi be doing to grow at 7 percent like Tanzania and Ethiopia or 8.7 percent like Rwanda?’ Can this budget address such issues with the help of us honourable members?,” Gwengwe said.
On job creation, Gwengwe said while the budget talks of the internship programme, it is sustainable jobs that will improve the livelihoods of Malawian youth.
“The all-important question is whether the government has capacity and space to recruit more. The wage bill in the budget is at K478 billion as we speak. Can the government recruit more?
“We live in a country that must take issues of job creation very seriously. While our fellow youth in Rwanda are getting jobs at the newly built state-of-the-art Volkswagen car assembly plant, here in Malawi, G4S prides itself in being the second largest employer in the country employing 10,000 youths. We, certainly, can do better as a country,” he said.
“Jobs will be created if the private sector is given an enabling environment to flourish; incentives to encourage companies to recruit more. If the tax regime is not competitive for the private sector, jobs will continue to be exported to neighbouring countries and beyond as our youth languish in abject poverty.
“A budget that wants to create jobs must not allow companies to shrink or close. It must not allow companies to retrench. It must encourage companies to recruit. I have Castel in mind. I have Chibuku in mind, I also have Nampak in mind,” he said.
On economic empowerment, Gwengwe said the quickest way to empower indigenous Malawians is to follow procurement laws and policies.
He said a deliberate policy must be acted upon to give 40 percent of procurement, especially for generic goods and services to Malawian youth and women”.
He added that Malawi has a serious challenge in absorbing foreign financed resources, giving an example of a number of projects which are far below half of the allocated resources as at mid-year.
According to Gwengwe, when the country fails to utilise donor funds, they revert back to source.
“As we look for resources to fund the fresh presidential election [on May 19 2020], the committee encourages the Minister to relook at votes with huge upward revisions. For example, vote 341 Malawi Police Service, the vote has been revised from K54 billion to K77 billion. Why?
“ORT has been revised upwards by a whooping K13 billion at a time Malawi Electoral Commission’s budget is K3 billion shy. This House certainly, needs a thorough explanation,” he said.
According to Gwengwe, Malawi is going through serious challenges in project implementation, and that the country seems not ready to utilise donor funds in project implementation.
“Calling a spade a spade, we are a nation obsessed more with personal allowances rather than efficient public service delivery. We care more about self-enrichment and much less about our country, our brother on the street, or our sister in the village. We need serious soul-searching on our patriotism and pride for our beautiful country.
“It is efficient public service delivery that has transformed Rwanda in so few years. Rwanda’s Doing Business Ranking of the World Bank is consistently the best in Africa and ranks high with the world’s best,” Gwengwe said.
Lilongwe City Central legislator, Alfred Jiya, added that getting a job in Malawi has become a very big challenge to the youth who are not politically connected.
“If you are not a blue-eyed boy, then your chances of getting a job are minimal,” Jiya said.
Lilongwe Mpenu MP, Eisenhower Mkaka, said the fact that the perfomance of grants is shrinking shows that donors have little trust in the current administration.
The House yesterday rose before Mwanamvekha could give directions on whether the House will go into a Committee of Supply or not.