A national budget is a promise to Malawi taxpayer

Since Finance Minister Goodall Gondwe presented the 2018/19 financial blue print, newspapers and several other media platforms have described it as a campaign budget. Nothing could contradict this. What was, however, conspicuously missing in the fiscal plan is how government intends to raise the K1.5 trillion. And that in my view, is where the biggest problem is.

Finance Minister Goodall Gondwe unveils 2018/19 budget

Here are some highlights of the budget that give it the tag: campaign budget. Chiefs’ honoraria were raised by 100 percent. Without doubt, they are the biggest beneficiaries of the budget. The malata and cement subsidy saw a windfall of K10 million from K7 billion in the last budget. The Farm Input Subsidy (Fisp) which should, in essence, have been scrapped off, was raised to K41.5 billion from around K31 billion in the previous year.

One demographic that is also a key beneficiary of the budget are youths who have been allocated a whopping K10 billion. Some 10 000 youths will be employed in afforestation programmes.

Government has promised to employ 10 500 primary and 500 secondary schools teachers. Medical personnel who have in the past four years been languishing in the townships and villages will now be employed—1 000 of them. Senior civil servants will get a 10 percent salary hike while junior civil servants will see their salaries rising by 20 percent. For civil servants who want to pursue tertiary education up to PhD, there is K2 billion waiting for them. The pay as you earn (paye) tax free threshold has been increased from K30 000 to K35 000. Census and elections due this year and next year, respectively, have each been funded at K31.5 billion. The icing on the cake is the allocation of K20 billion for maize purchases.

Now let us get this right. The cost of living is going up by the day. So everyone needs a pay hike to make ends meet. Or, if you are in business, you need a higher markup for your products and services. You want to remain in business.

The main highlight of the 2018/19 fiscal plan is that it is so clear government does not want to hurt voters in an election year. The same government which felt it was a small issue hurting the electorates when elections were far away, now thinks otherwise. This budget, therefore, is just bait.

The same government which is on record as saying it’s not its job to employ all the nurses and other medical cadres it trains, now thinks otherwise. With regards to employment of nurses and other medical cadres, a political statement Gondwe should not have made is to say government does not want to continue what was started in 2013. Why did the DPP government which has been in power since 2014 not reverse this earlier?

In fact, it is a blue lie that the policy of not employing nurses and other cadres soon after graduation. This started in 2015.

Then there is the issue of where the money to fund the K1.5 trillion budget will come from. During the past two financial years, government has had to revise downwards its budget allocations because it could not raise enough money to fund the budget commitments. What has changed this year for government to think that it will be able to raise K1.5 trillion? Despite government procuring gensets to increase power generation, power outages remain the order of the day. This is a dampener on the manufacturing sector which is the engine for economic growth.

Unfortunately a national budget is a promise. So fearing the consequences of hurting the demographics that have been promised a windfall in this financial plan, I can guarantee that certain sectors will suffer. Government will have no choice but to divert funds from other important sectors to fund the chiefs’ honoraria, affordable housing and malata subsidy programme, youth programmes and Fisp. I will be back to remind government about this.

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