Professor of Economics at Chancellor College, constituent college of the University of Malawi (Unima), Ben Kaluwa has backed Minister of Finance Goodall Gondwe’s budget plan for 2014/15 fiscal year, saying 16 percent increase from last budget is in line with the country’s economy.
National pre-budget consultation meetings began last Thursday and Finance Minister has presented the budget plan which has increased by almost 16 percent for the last budget.
Kaluwa noted that the current administration’s budget estimate of K743 billion is feasible.
“It is expected every time that the budget should increase and what the minister has presented is the size of the budget as of now,” said Kaluwa.
He further said the increase is in line with the country’s economy because “our economy has grown and our problems have grown as well”.
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Kaluwa, however, indicated that there is more expectation especially on support from the cooperating partners.
Development partners under the Common Approach Budget Support (Cabs) pulled out their support to Malawi following cashgate scandal and are yet to resume aid.
“We would love if the development partners would come in, not necessarily through the budgetary process, but through sector interventions,” he said.
He said Malawi need more support from development partners and their support can always produce sound impact if it comes straight to specific sectors of the economy.
Kaluwa also discouraged government from financing the deficit through foreign debt and local borrowing.
He said it was high time Malawi came up with better ways of financing the budget other than relying on foreign debt.
“It is going to be a nuisance of a problem for government to resort to external borrowing because it is not healthy for the country as of now.
“It is a dangerous a approach to rely on borrowing because we are not supposed to be in a position of being so definite about our capacity to service any kind of foreign debt from now,” he said.