Economists Jumbe, Mbewe tear apart Malawi budget statement: Lipenga full of contradictions
Malawi’s former Finance Minister, Friday Jumbe and former Central Bank governor Victor Mbewe have described as “vain” a key statement made by the Finance Minister Ken Lipenga during the presentation of 2013/14 budget in parliament on Friday, saying it failed to highlight, clarify and summarize issues contained in the main financial plan.
The two renowned economists speaking on ‘Contemporary Issues’ program monitored by Nyasa Times on Malawi’s Radio Islam have also described the entire budget statement as a document full of contradictions and imaginations, saying what it is projecting will not be translated in reality.
“It’s more of an opportunistic budget,” said Jumbe.
“It is no different from last year’s budget statement but the only change is that in this year’s key statement, the minister of finance has hidden information because there is no mention of allocations to key ministries because we need not to go through the whole tiresome budget statement to know the figures. Those were points which had to be highlighted in the ministers’ key statement,” noted Jumbe.
Jumbe said it is doubtful that the much touted Economic Recovery Plan (ERP) will ever put the country’s economy back on track saying the appreciation of the local currency (kwacha ) which is perceived to be the road to the economic recovery is not reliable describing it as “accidental”.
“The appreciation of kwacha cannot be taken as a yardstick towards economic rebound because it was not planned,” said Jumbe, adding “ It has just happened by accident. Even the Reserve Bank of Malawi was not expecting the kwacha to appreciate this time around. And that’s why the Malawi Energy Regulatory Authority and Electricity Supply Corporation of Malawi are reluctant to reduce fuel price and electricity tariffs respectively because they are fully aware that the kwacha will soon began to nose dive.”
Jumbe said since the 2014 will be the year of elections, there may be political pressure to the monitory authorities to maintain the exchange rate just to win the votes.
“If the appreciation of the kwacha was genuine and long lasting we could have seen further reduction of fuel prices, electricity tariffs and prices of other commodities and services at the pace the kwacha is appreciating,” he said.
Jumbe is president of a newly former New Labour Party
On his turn, former Reserve Bank of Malawi governor, Victor Mbewe faulted the way the government is implementing its agriculture plans which he said has left most of small scale farmers stranded.
“For example, last year the government was distributing soya beans seeds to farmers in the central region promising them that it will be sold at K600 per kilogram. But now soya beans farmers like in Kasungu are stranded as no one is buying from them and if anything they are just given K140 per kilogram. This means that government officials were not yet found the market and are not even able to make the market available to the farmers,” he pointed out.
Mbewe also wondered why the budget only prioritized on primary education explaining nothing on university education.
“And where will the government take the 10,500 primary and 1,975 secondary school teachers it intends to employ while we know that we don’t have enough teachers training institutions in the country. It would wise if they said will train more teachers not employ untrained teachers.”
Mbewe also trashed the government plans to give out loans to university students arguing that it’s a waste of time to give students money to buy foods.
“What is this? I also learned in the University of Malawi but the government was providing us everything; accommodation and food. You can’t allow the student to skip classes and go to the market looking for bonya,” said Mbewe.
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