Malawi opposition says Finance and Economic Planning Minister, Goodall Gondwe’s tough love for the nation in the next financial year has been commended for coming out bluntly to concede that the country’s economy is in crisis but described the 2016/17 financial plan presented on Friday as “deficit budget” and pro –IMF.
Malawi Congress Party (MCP) finance spokesperson, Kusamba Dzonzi trashed Gondwe’s s fiscal gymnastics and said the Finance Minister tabled a budget that pleases international lending institutions such as International Monetary Fund (IMF).
He called it “IMF Budget” full of dreams than reality.
Dzonzi said as a party they are still waiting for the day the government through the Minister of Finance will present a Malawi budget with real issues that affect Malawians.
He said it is not a secret that the projected GDP increase of 5.1percent and stabilisation of inflation rate is coming from IMF as the Minister confessed that those projections are from IMF not him.
“When minister of finance and when President through his SONA agrees and admitted that were in economic crisis and they come to us and tell us they expect economic growth of that magnitude? To us that is a dream its good to dream but you don’t have to dream during daylight, dream is for those who are sleeping. I thought this time around the Minister will be honest to Malawians that since we’re in crisis we should not expect economic growth lying to us just to please someone at Washington,” said Dzonzi.
“Do we really have to wait for someone outside to tell us about our economy, the problem is that we listen too much to IMF and World Bank but we forget that these are banks and banks don’t run government they are there to make profit not to help poor Malawians. The budget is for IMF ,the minister could say it and refer every sentence as according to IMF,” Dzonzi pointed out in an interview with Nyasa Times.
Malawi to print more money
People’s Party spokesperson on finances Ralph Jooma said Malawians must brace for tough times ahead with government acknowledging that the economy is in story state.
He noted that with K1.13 trillion budget, the government will be printing more money about K70 billion to cover the gap after total revenue to spend is pegged at K965 billion.
Jooma also questioned the credibility of government’s assertions that the economy will grow by 5.1 percent , saying they can’t trust it as last year the same Finance Minister told them the same figures which he confessed that it failed to reach due to higher and this year over half population of Malawi face hunger.
On fiscal discipline, Jooma said in Gondwe’s statement there’s nothing which shows that there was fiscal discipline last year and they believe his budget is not the reflection of what is on ground.
Jooma said government should ensure the we live within its means, must not burden the next generation with debts.
In his statement, Gondwe said IMF projection could create the risk of a higher domestic financing outturn in the event of a shortfall in actual collections from Malawi Revenue Authority (MRA).
“It seems prudent to argue that MRA has the capability to collect more revenue than it currently does as a proportion of GDP. MRA is, therefore, being requested to rise to the needs of the country at this crucial moment when the enhancement of domestic resource mobilization is critical for the attainment of our national priorities,” Gondwe said in parliament.
Gondwe told the House that at MK190.4 billion or 4.4 percent of GDP, there is a 45.5 percent increase in grants compared with the 2015/16 revised budget provision of K130.9 billion.
“ This is due to a high rise in project grants that have been pledged, particularly by the European Union,” he said.
Gondwe stated that during his recent visit to Malawi, the President of the African Development Bank committed to provide budgetary support (a program grant) worth US$18 million, which is approximately equivalent to MK13.6 billion.
“This projection for program grants represents a 33.8 percent decline over the projection made for 2015/16 of MK20.5 billion.
“ The World Bank and the European Union may also provide budget support once they finalize their own evaluations of the public finance and economic management framework during the course of the calendar year,” Gondwe said.
The government ‘s purse keeper said the pending budgetary support amounts from the two multilateral donors are being treated as “memorandum items” which, once they materialize, will be used to fund specific expenditure items
According to Gondwe, the proposed budget is optimally “developmental”.
MPs will debate and critique the Budget as a whole on from Monday.Follow and Subscribe Nyasa TV :