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Uncertainty surrounds pre-budget consultations

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By Taonga Sabola:

Malawians may this year not have a chance to make their contributions regarding what they want to be in the next national budget as they are yet to be consulted on the matter.

The 2019 budget meeting Parliament is expected to start in Lilongwe on June 20 following an orientation programme of new members of Parliament.

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Traditionally, the Minister of Finance solicits views from stakeholders such as industry captains, economists, accountants, members of the civil society and the academia around March and April on what must form part of the national budget.

The consultations also give Capital Hill an idea of reforms to be incorporated in the budget to bolster business performance.

Ministry of Finance spokesperson, Davis Saddo, said Tuesday, measures had been put in place to ensure that the budget process is not affected.

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“In the spirit of open and participatory budgeting, the Ministry of Finance has always embraced pre-budget consultations because it is a good window for the Minister of Finance to interact and have thoughts of various players in the economy and Malawians at large. Already, officials from the Ministry at a technical level have done the exercise through consultative meetings with stakeholders through tax shopping meetings. The exercise helps in budget planning and the formulation of some tax-related policies.

“But at a ministerial level, it should be noted that it is the prerogative of the Minister of Finance to conduct the exercise and it has always been conducted.

Being a special year where the normal calendar has been affected by elections, measures have been put in place to ensure that there’s no disruption to the government budget,” he said.

Saddo noted that if the budget were not passed as at the end of the financial year, provisions are there in the laws on the use of a provisional budget as the government awaits processes to have the budget approved by Parliament.

“That window can equally give time to the Minister of Finance to conduct the exercise if need be,” Saddo said.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Chief Executive Officer, Chancellor Kaferapanjira, said pre-budget consultations had lost their values in the past three or four years.

Kaferapanjira said the consultations turned into talk shows where the Minister of Finance turned up just to show his face.

“Our recommendations were neglected in whole despite our submissions originating from the private sector. Sometimes, for example last year, the Minister delegated his responsibility to the Secretary to the Treasury.

“That speaks volumes in terms of the importance the Minister attached to the consultations. This year, the private sector’s expectations was and still is dependent on the quality of the Minister who would take the portfolio. So probable pre-budget consultations may not be missed because expectations were already at their low,” Kaferapanjira said.

Economics Association of Malawi President Chiku Kalilombe, said the prebudget consultations are crucial as they aid government in drawing ideas from other circles directly affected by the budgeting process.

Kalilombe said while not all ideas have been taken on board, there are some good ones that have been incorporated.

“This year, with elections, we cannot blame government for reaching its this situation. We will still be proactive and submit our ideas beforehand. If the budgeting process was also not commenced before elections, we would urge for a slight delay if need be to allow proper formulation.

“However, within that period, we would urge prudence as such a gap might also affect the expenditure pattern and adversely affect the budget,” Kalilombe said.

Institute of Chartered Accountants in Malawi (Icam) Chief Executive Officer, Francis Gondwe, said the budget consultative meetings have been a good platform for the government to interact with different stakeholders.

Gondwe said there have been good uptakes of proposals and suggestions taken by the government.

“The adoption of suggestions in the formulation of the tax policies is solely at the discretion of the government.

As stakeholders, we appreciate this fact hence our understanding when not all our suggestions are taken on board.

“We also understand that the government of the day may have exclusive agenda in pursuing some policies contrary to stakeholders persistent pushing. For example, the Farm Input Subsidy Programme (Fisp), various stakeholders who contribute to the policy formulation have advised the government either to scale down or stop the programme,” Gondwe said.

He added that Icam has not submitted its memorandum officially but through a meeting it had with the technical team from Ministry of Finance in March this year.

“It was highlighted by the visiting team that, this year, the minister would not meet stakeholders. It was understood in the context of preparation of elections,” he said.

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