Jooma trashes ‘irrational’ K7bn Malawi housing subsidy

Former economic planning minister Ralph Jooma has described the K7 billion budget allocation to the subsidized cement and iron sheets  programme  by the  ruling Democratic Progressive Party (DPP)as irrational, saying the  figure is astronomical and misplaced priority.

The Mangochi-Monkebay parliamentarian remarks follows what   leader of opposition in Parliament Lazarus Chakwera said that government should have instead provided private sector incentives for production of cement and iron sheets.

In his contribution to the 2014/2015 budget in parliament Tuesday said government should consider subsidizing other national services such as health, education and water.

“We have had subsidies in this country but if there is one subsidy that is more irrational, it is this one: the one that will be used to buy iron sheets and cement,” said Jooma.

“When the nation is subsiding water, millions of Malawians benefit. When the nation is subsidizing health, agriculture, and education; millions of Malawian citizens benefit. Even at the time when this nation was subsidizing electricity and fuel, millions of Malawians were benefiting,” said Jooma.

He noted that K7 billion will be used on 11,000 families the whole country: “I have done my calculations. In five years how many families? So many Malawians will suffer!”

Jooma further said that the poor families “are simply waiting to get the coupons and sell to the well-to-dos who can be able to match that allocation and buy the iron sheets and cement. This is not going to work.”

In the house, the matter has received criticism including Lilongwe East MP Ezekiel Ching’oma who said the impact of the subsidy would be negligible considering that only 100 people would be targeted in each of the 193 constituencies.

He said when DPP was campaigning; they never said the subsidy would be targeted, but changed tune after winning the vote.

Said Ching’oma: “It means that for each constituency, there will be 500 beneficiaries by the end of the five years. It has to be noted that 80 percent of Malawians live in poor housing, in this way the impact of this programme, after five years, will surely be close to negligible.”

Rumphi West MP Jacqueline Kouwenhoven said the new subsidy would just create a new dependency on the part of Malawians.

She said: “When we start building houses for people, next they will look to government for other areas. That K7 billion could have gone into health care or education and people would be better helped through this.”

Dowa East MP Richard Banda said the new subsidy “should have been pended until our economy was manageable.”

Minister of Finance and Economic Development, Goodall Gondwe is expected to respond to observations on the budget before Parliament rises.