Kandondo unveils K257 billion Malawi budget
Finance Minister Ken Kandodo on Friday made his maiden budget speech when he presented a K257 billion Budget for 2009/10 fiscal year pointing out that the economy will grow 7.9 percent while inflation will stand at an average 9.7 percent.
Presenting the Budget in the national budge, Kandodo told lawmakers:“Despite the global economic downturn, we will record meaningful growth,.”
He announced a 15 percent increase in civil service salaries.
The Finance Minister also announced .tax exemption on purchase of buses, airplane, spare parts for planes, furniture and TV.
In a bid to boost the tourism sector, the Finance Minister also announced tax exemption to hotels of minimum 50 rooms.
In this year’s budget value added tax vat has been raised from 2 million Kwacha to 6 million Kwacha and that government has removed VAT on mosquito and sand fly nets for local production of mosquito nets in a bid to prevent the spread of malaria.
Government has removed duty from rail locomotives, aircraft engines and spare parts saying this measure aims at reducing transport coast.
Increased duty on vegetables, meat, fish, powdered milk, coffee, tea, nuts, spices, potatoes, onions the duty of this commodities now is at 30% from 10% in order to increase production of local products.
Government has removed duty on construction materials, all medical supplies recording duplication, photographic and projection equipment in both film and music industries.
Kandodo who presented his 36 paged budget document for almost one hour and thirty minutes, gave Ministry of Agriculture and Food Security held by President Bingu wa Mutharika a lion’s share in the budget with about K33 billion.
The country’s purse keeper said the farm inputs subsidies will this year not cover the cash crops as it were last year but the program will only cover food crops.
“We are scaling down on the subsidy program mainly because we want to promote mechanized agriculture,” the Finance Minister told Parliament.
He told the lawmakers that the Mutharika administration will spend 17.8 billion kwacha ($127 million) on fertilizer subsidies, down 39 percent from the year earlier.
Kandodo pointed out that the country’s economy is expected to grow in the face of global financil turmoil.
“Malawi’s economy is projected to grow in real terms by 7.9 percent. The forecast is underpinned by expectations of strong agriculture production, (the) imminent start of uranium production at Kayelekera and continued growth in service sectors such as telecommunications,” the Finance Minister said when he presented the budget.
The Ministry of Education has been allocated about K24 billion while subvention on the University of Malawi amount to K32 billion.
Kandodo also outlined that the Ministry of Health will be allocated about K23 billion.
Transport Ministry received about K30 billion while Irrigation has been given K5.78 billion.
Members of Parliament will scrutinize the budget, debate it for the next 21 days before approving it into an appropriation act.
Tagged with: budget, economy, Kandodo, parliament
I wonder if there is any thought about renewable energy promotion/incentives..Especially Solar energy. This is what the Malawi Industrial Research and technology Development center should have been venturing into (excuse me if they do already). This technology is so easy to assemble and maintain. This would suffice most of our domestic needs for an average home.
I understand that Michael Saner has included a 50MW concentrating solar power (CSP) plant in his project planning for the Kangankunde project (Balaka area)once the mineral rights are returned to him by the Ministry of Mines. However, said Ministry has refused to do this in the more than 3 years since the Blantyre High Court ruled in Saner’s favour.
bomailo
I knew kuti Boma la Bingu silinama ayi. Ndikungodikira 15% yangayo
i wish the subsidy could also be on cash crops to boost smallholder farmes who are also contributing to the growth of the economy. I hope kandodo knows want it means. still more not so bad!
Its good start indeed but may be lets wait for the action otherwise speaking is one thing and acting is the other.
BOMA! BOMA! BOMA!
Our economy is small; the President buys hammers or what ever you call them, meaning buying foreign exchange and he fires the RBM governor. What do we export more to generate foreign exchange? Closed tobacco auction floors?
Because of Uranium production at Kayelekera, then we start to believe its time to borrow more and spend wastefully? Hehe, actually people needs salary increment but hope the increment of 15% is not part of the budget to shut people’s mouth.
Who will buy airplane in Malawi that they need Tax exemption on airplane? Mr. President for his grand-children or those few rich people that circle of income inequality continues to let income be concentrated in hand of few people? Is it the reason why you want and freeze assets of Bakili badly that he cannot buy airplane?
Reading this budget just brings a tear to ones eye. I do not see real initiative that will bring about step change in our economic development! It just reminds me of the good old Banda days of focusing on Agriculture and food security as a central govt economic policy. Malawians, we are just going round and round in circles in economic development policy. We achieved full food security under Banda in the 80s. Under Muluzi we completely went backwards several years and now we are at least retracing our steps forward back to where we were in the 80s. Where as I applaud the govt for achieving food security and positive GDP growth of 7%, it is nothing new and it is not enough to pull us out of poverty in real terms.
Malawi in this 21st century must seek new 21st solutions not recycling the same old tired 80s strategies. As a nation do we really have to go down this full circular motion even hiring Banda’s relatives to show us the way back to the eighties policies of Agriculture development.
After 45 years of independence and we are still lingering around a GDP of US4bn (neck and neck with sanctions ridden Zimbabwe) while in the same period war torn countries like Mozambique have shot past us in GDP growth to US9.7bn or Singapore who got independence after Malawi and whose president (Lee Kuan Yew ) came here to learn from us today their GDP stands at US$154bn.
Therefore, if you politicians really love your country then start implementing real GDP growth strategies with a goal of US$200bn by 2040 (I dare you!!). 7% GDP growth is not good enough for where we are vis-à-vis where we need to be.
No it is not Voodoo that will get us there. We need science and technology to drive development policies. We need an integrated development strategy encompassing manufacturing, agriculture, energy, services and telecommunications and a strong research and development (R&D) base among other things. For example, we need to have metal industry (Iron /Steel, Aluminium, etc), Glass, Plastic and wood products industry at the bottom. Common sense tells us that once we have metal production we can start producing building local infrastructure eg Chitipa to Nsanje railway, modern boat (Ilala) from Karonga to Monkey Bay, fertiliser production, mechanised agriculture modern steel reinforced buildings etc. using science we can make petrol and diesel from our crops- maize stalks or cotton seeds. We will export more manufactured goods than agricultural ones. We will not import steel any longer thereby achieving a two pronged attack on development of export led growth and import substitution. The benefits to us common people- high paying jobs and employment and improved standard of living for all. We need a debate on the way forward not just this perpetuation of a monolithic agriculture based economy. I don’t care which commodity is the main export crop I say lets develop industrial goods that we will export; selling a kg of tobacco or rice is nothing compared to selling Kg of steel and that is how we will grow our GDP to US$200bn. Achieving that goal will be like landing on the moon for Malawi so lets go for it!
I like your thoughts; people are still playing around at the expense of future generation in this global market.
They need to ask themselves what they want. Is it survival of the fattest not in sense of body, but greed? I have long looked at Illala, railways and other things, and wonder what these legislators want!
great news on building materials
A civil servant receiving MK20, 000.00 a month will have MK3000.00 increment and someone having lets say MK300, 000.00 a month will have MK45, 000.00 just by the same 15% increment. What about someone receiving MK1, 000,000.00 or over?
I would rather increase not on same percentage, but depending on ranges or salaries. Lets say MK10, 000.00~MK50, 000.00 by 20% MK50, 000.00~MK100, 000.00 by ?% and MK100,000.00~MK150,000.00 by ?% and so on whereby as monthly pay is high, the increment % becomes less. Otherwise, those who are at the bottom, which comprise the majority, will still suffer and see you guys with more and more hammers.
What have u sent aside for the soldiers who at most are just given 3 billion to run the MDF and expect miracles from them. I move to propose that they be given 15 billion to enable them upgrade their equipment to UN status.