Malawi’s annual budget crucial to welfare of the people

Malawi’s  Minister of Finance, Economic Planning and Development Goodall Gondwe has presented an annual budget that is reflective of the recovering economy.

While maintaining the objective to sustain and deepen economic growth, the budget has ensured the gains of the economic recovery trickle down to the grassroots.

Government has therefore come up with a budget that has made significant allocations towards social and economic development programmes “crucial to the welfare of our people”, Gondwe said.

Among the notable factors is that of the total MK1.5 trillion budget, up to MK1.05 trillion is expected to come from domestic revenue. Part of the economic recovery story has been improved revenue collection by the Malawi Revenue Authority.

And so Government has ensured that Malawians share in the progress in the economy, giving generous allocations to youth, the Farm Input Subsidy Programme (FISP) and the decent housing subsidy programme both of which target the poor, among others.

Both Farm Input Subsidy Programme and the housing subsidy programme have seen significant increases in budget allocations and number of beneficiaries. The two progammes are designed to benefit the poor.

Fisp has been allocated K41.5 billion, which will reach out to one million beneficiaries for both fertiliser and seeds from the 2017/18 revised figure of K33.2 billion which targeted 900 beneficiaries.

The Decent and Affordable Rural Housing Project—the President’s signature project—and another social spending initiative, has been allocated K10 billion, representing an increase of 14.3 percent from the 2017/18 revised figure of K7 billion with some 8 000 houses expected to be constructed and rehabilitated.

The Mutharika administration has made a good impression on youth empowerment through the signature community technical college programme and expansion of public university infrastructure to increase access and improve quality of public university education.

The budget has spelt out further measures for the youth. To address the problem of needy youths failing to enroll in public universities due to lack of tuition, Government has doubled the allocation to Higher Education Loans Board from MK4 billion to MK8 billion.

Government has also announced additional youth development programmes. The Youth Tree Programme will employ 10,000 youths while the Youth Internship Programme will recruit 5,000 youths. These 5,000 youths will be placed in government departments; the objective is that they should gain knowledge, skills and ethics as a way of nurturing them for a career in the civil service and private sector.

The youth were targeted by, among others, a K4.8 billion allocation to the newly-created Youth Internship Programme designed to recruit 5 000 youths aged between 18 and 30,  to be placed in various ministries, departments and local councils.

It has also announced Capacity Building Programme which targets youthful civil servants who it will support up to PhD level.

The budget increased salaries of junior civil servants by some 20 percent (with senior grade officers to receive a 10 percent hike), driving the wage bill to K392.0 billion (7.4 percent of the GDP) and representing a 24.3 percent increase over the 2017/18 likely outturn.

The social development sectors are also set to enjoy the benefits of an improving economy as government has allocated funding for recruitment of 10,500 primary school teachers, 500 secondary school teacher and 1,000 medical staff.

Road infrastructure development has been one of the priority programmes of President Mutharika’s administration and the 2018/19 budget has announced financing to projects such as Balaka-Salima Road. The road is part of the lakeshore road and key to tourism in Malawi. However it has been in bad shape for years now.

Since Government implementing decentralization policy, it has been making significant investments in programmes thaf transform the welfare of rural communities.

Therefore in the budget government has increased allocations towards Constituency Development Fund, District Development Fund and Local Development Fund. These windows finance local development projects such as classroom blocks, health centre facilities and child care centres.

To take development further down to the grassroots, Government has announced the commencement of another funding window for rural development that will service 300 Area Development Committees. It has allocated K6 billion for the fund.

In general, the development budget has increased by 25.6 percent. Agriculture, transport, education, and health remain the major drivers of development focus and priority in terms of budget allocation.

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