Malawi’s fiscal outlook dominated headlines in the local media with newspaper columnists and analysts adding their voices to the Mid-Year Budget Statement which Finance, Economic Planning and Development Minister Goodall Gondwe presented to Parliament on Friday, with calls to cut wasteful government spending and not burden the poor.
Economic commentator and newspaper columnist Ephraim Munthali writing on his ‘Cut the chaff’ page in Weekend Nation, pointed out that the ‘budget problems much bigger than advertised’.
Munthali wrote that financial outturn speaks volumes about the competences of Gondwe’s team at Treasury when it comes to revenue modeling in the context of tax base and revenue forecasting.
The fiscal chief is dealing with an economy that isn’t growing, a revenue shortfall, massive demands on the public purse and rising government debt.
But on the government plans to institute travel policy measures which would reduce recurrent expenditure, Muthali tips the government purse-keeper to launch a comprehensive review of State spending.
“I am not encouraging reckless slashes to the budget. Rather, I am saying that there are—apart from travel-related wasteful spending—several areas government can make savings on,” wrote the columnist.
Munthali, who is also Managing Editor at Nation Publications Limited, advised that , instead of rewarding inefficient and ineffective programmes such as the Cement and Malata Subsidy with billions in increments, this initiative should have been suspended all together because “it has little bearing on the larger economy other than securing some votes for the ruling Democratic Progressive Party (DPP), enriching the governing elites’ cronies through contracts and fattening the bank accounts of civil servants involved in the initiative.”
Authorities should also crack down more on the waste, fraud and abuse littered across government ministries, departments and agencies (MDAs), he pointed out.
“Capital Hill must also look into unreconcilled transactions that are a hideout for thieves in government and the administration should never repeat bad bailouts such as the K45 billion forked out to the Agriculture Development and Marketing Corporation (Admarc),” wrote Munthali.
The columnist advised that public procurement system must be must be overhauled if the country is ever going to have resources to develop and sharply cut poverty, saying there is wastefulness through : Inflated prices, faulty bid evaluations and contract award decisions are costing government too much.
Munthali has made an appeal to members of Parliament to push for the reforms and resource saving measures.
“Legislators should, of course, demand more tough measures of arresting waste, cut the deficit and invest in our people,” he concluded.
In his column , Backbencher dubbed the budget woes as ‘Tchopanomics!’, a term derived from the popular dance of the Lhomwe, a tribal grouping which the deceased president Bingu wa Mutharika founded and his brother incumbent President Peter Mutharika consolidated by appointing Ngolongoliwa as its paramount Chief (Mwene-wa-mamwene).
“Tchopanomics is steeped in a strong sense of economic emancipation which made Bingu mess up old-established relations with western donors early in his short second term (2009-12). He claimed western aid, unlike Chinese aid which came without strings attached, was a mere tool for neo-colonialism, and was convinced that by adopting a zero-deficit budget, Malawi could manage just fine without their aid,” wrote Backbencher.
The columnist noted that the take-off for such a switch could only be gradual considering that at the time aid was filling in the national budget a deficit of 80 percent on the development side and up to 40 per cent of the recurrent side.
“Predictably, the zero-deficit budget didn’t attract foreign investors and there was no trade and no foreign exchange. The economy tanked and we’re yet to recover,” he noted.
When Peter Mutharika assumed power in 2014, he picked up from where his brother Bingu stopped, boasting without evidence that we are managing just fine without budgetary support, the columnist pointed out.
Presenting the Mid-Year Budget Statement to Parliamenton Friday in Lilongwe, Gondwe forecasted that economic growth rate could reach 7 percent and inflation rate is estimated at 11 percent this year, against 20 percent in 2016.
The IMF on Tuesday projected the economy to grow between 3 and 5 percent, and 7 percent in the medium-term.Follow and Subscribe Nyasa TV :