Malawi Congress Party (MCP) parliamentary spokesperson on finance Joseph Njobvuyalema has asked donors to give Malawi a bailout package to help mitigate the effects of 48 percent devaluation of the local currency – Kwacha – against the dollar.
On May 7, Malawi’s President Joyce Banda made a decision to devalue the Kwacha from K168 to K250 to the dollar.
Njobvuyalema told Parliament on Monday when he was commenting on the 2012/13 budget that was presented last Friday that the lowering of the currency against the dollar has hit locals hard.
“The recent devaluation has automatically thrown people deeper into income poverty,” said the MP.
Malawi is one of the poorest countries in the world: 74 percent of the population of this southern African nation lives on less than 1.25 dollars a day, and nearly one in 10 children die before their fifth birthday.
Njobvuyalema said “even some local companies who rely on importation of raw materials and spare parts are faced with rising costs of production. “
He said the donor partners and the global lender International Monetary Fund (IMF) “need to be clearer in terms of the safety nets support so that more Malawians should not slip further into vulnerability.”
The kwacha was devalued as part of moves by the new government to restore donor funding.
The former Democratic Progressive Party (DPP) government had rejected IMF calls to devalue the currency.
Taking his turn, DPP spokesperson on finance, Frazer Nihorya Nkhoma , said the budget statement presented by Finance Minister Ken Lipenga showed the government had accepted ideas of IMF without any doubts.
The former deputy finance minister told the House: “Is this budget pro-poor or not? This carefree approach exposes Malawians to high economic risk.”
Nihorya, Mulanje-Limbuli MP added: “The 21 percent offered to Civil Servants it’s a mockery considering a 49 percent devaluation and sky rocking inflation at 18.4 percent.”
He said an “increase on electricity tariffs will see depletion of forest and use of environmental products. “
The DPP finance spokesman asked government to “reverse this punitive and retrogressive measure.”
He asked: “Why should Government discriminate mobile phone providers by increasing their corporate tax when the demand for their services in rural areas is high?”Follow and Subscribe Nyasa TV :