Ambitious and bold K2.2tn Malawi budget to fulfill campaign promises: Will Tonse deliver?

Finance Minister Felix Mlusu on Friday presented a K2.2 trillion National Budget which, despite government’s shrinking resource envelope, is visibly bold and ambitious in ensuring that every Tonse Alliance campaign promise is delivered.

Mlusu, arguably a novice in political governance, definitely drunk immensely from Vice-President Saulos Chilima’s political and economic experience—not just as Economic Planning Minister; but also his resolve to ensure every word he spoke during campaign comes to fruition.

While as Malawi Congress Party (MCP) campaign promises were generic, UTM was more specific and when the two headlined Tonse Alliance, the combination fine-tuned their appeal to the voters and, now, the public has specifics to pin them down on.

In the first budget, government’s biggest promise was the creation of 1 million jobs. However, Mlusu’s presentation is somehow sketchy though filled with comforting details of assurance, symbolizing their commitment.

Explained Mlusu: “ It has become quite apparent, Madam Speaker, that most of the sectors have enormous potential to generate jobs if certain policy actions and incentives are implemented as a matter of urgency.”

In his words, Mlusu, said government will implement policy actions and provide appropriate incentives to unleash this potential in sectors such as agriculture, mining, tourism, manufacturing and ICT.

The Treasury Czar said the job creation agenda will be buoyed by a number of several initiatives that have already been initiated which he said included establishment of  modern and fully equipped job centres which will first be established in Lilongwe, Blantyre and Mzuzu.

“The Job Centres will assist job seekers to access employment information from employers and vice versa. These job centres will also be connected to Government systems that will enable reporting of number of people employed in real time,” he  told parliament.

Related to the creation of 1 million jobs is another move Mlusu announced bordering on total rebranding and increased allocation to government finance company, Malawi Enterprises Development Fund Limited (Medf) from K15 billion to K40 billion.

He noted that with the move, government is expected to support the creation of 200,000 enterprises run by the youth and women.

“These enterprises in turn are expected to create over 600,000 jobs which will result in an increased tax base and improved welfare of our people,” he said.

Another hot campaign promise was the provision of cheap agriculture inputs to smallholder farmers.

In his address, Mlusu said K160.2 billion has been allocated to the Affordable Input Program in the 2020/2021 financial year—out of this amount, K132.7 billion is for fertilizer payments, K25.7 billion for maize seed and K1.8 billion for logistics.

On free water and electricity connections campaign promise, Mlusu only made a commitment saying Tonse Alliance government has embarked on a reform program of the concerned utility companies.

“It is upon completion of these reform programs when Government shall ably implement these promises,” he said.

Similarly, on the promise to reduce passport fee as well as to introduce free driving license renewal, Mlusu, again, only made a commitment, saying Government has already engaged the concerned suppliers as these services are currently being rendered to Government under contractual arrangements with third parties.

However, government has taken a bold move to fulfill their promise of meeting the need to increase disposable income for salaried employees and enhance their purchasing power.

Mlusu announced an increase of Pay As You Earn (PAYE) zero bracket from MK45, 000 per month to MK100, 000 per month.

Further, Mlusu also announced an increase in withholding tax threshold for casual labour from MK15 000 to MK35 000 per transaction.  The move, he said, is to help people engaged as casual labourers to earn modest incomes for basic needs.

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