Alliance Capital calls for realistic ways of wealth creation, poverty reduction

A weekly analysis column by financial company, Alliance Capital Limited has scrutinised national budget with a call to government to consider vying for realistic ways to reduce poverty while creating wealth.

In the paper, Alliance Capital deputy chief executive officer Christian Majavina said although it is pleasing to note that the budget has prioritised key sectors which aim to make an impact on poverty reduction little emphasis however has been placed on wealth creation.

The key sectors fighting poverty are agriculture and food security, social support and protection, education, health, transport, tourism, mining and energy.

Majavina explains that, poverty reduction means making poverty less prevalent but wealth creation on the other hand refers to the act of making a country, group, or person richer and more successful.

He said by comparison, poverty reduction is short term and has proved to be an ongoing process where as wealth creation is a long term process and if well focussed can yield a lasting cure.

Malawi Alliance Capital boss

Majavina: Alliance Capital Boss

According to Majavina, mining and tourism are two sectors that require serious consideration.

“On tourism government has removed taxes on off-road game, scenery viewing motor vehicles (Safaris). To ease the problem of transportation of guests in our hotels and resorts, government has also removed taxes on shuttle buses. This provision will allow hotels, lodges and inns with guest capacity of 50 rooms or more to import two shuttle buses every five years without payment of duties.

“We appreciate the efforts made but we feel that more need to be done to support tourism sector. But government needs to work on infrastructure development, like good airports, roads and hospitals close to tourism destination areas, these will attract real tourists not just back packers flooding the country,” Majavina said

He said poverty in Malawi could not possibly be reduced to a less prevalent as the country depends solely on agriculture with unemployment reaching to unbearable levels and the budget statement has not tackling any of this.

“We are of the opinion that entrepreneurship should be priotised if we are to empower the youth and enable them create wealth. Empower people to produce more goods and services, that way they will create enough wealth for themselves.

“Roughly translated, this would mean enabling people so that they could be self-employed. In the long run employment opportunities will be created,” said Majavina.

Alliance Capital said it is of the view that poverty reduction is a good cause, but thinks the more positive approach is to aim for wealth creation.

“Wealth creation for  every home and every family, and wealth creation for every community and every district. That will of course translate into wealth creation for the whole country, for the whole nation. With more wealth created, there will be more families that will be freed from poverty,” they conclude.

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