Mlusu unveils ambitious K2.2 trillion Malawi budget: ‘Living the promise’ of Tonse

Minister of Finance Felix Mlusu on Friday unveiled a K2.190 trillion national budget in Parliament geared more to fulfilling campaign promises of Tonse Alliance made ahead of the June 23 Fresh Presidential Election as well as in President Lazarus Chakwera’s first State of the Nation Address (Sona) delivered in Parliament last Friday.

The national budget, titled ‘Living the Promise’, has revenue and grants pegged at K1.435 trillion; domestic revenue pegged at K1.179 trillion and development expenditure K511.6 billion.

Though hopeful that the budget will focus on sustainable and inclusive growth among others, Mlusu was quick to underline that revenue collection fell by 11 percent due to the effects of the Covid-19 pandemic.

However, Mlusu was upbeat saying gross official reserves have remained stable at 3.1 months of import cover by June 30, 2020.

Noting that the Tonse Alliance government inherited a lot of fiscal risks such as a very huge public debt, Mlusu underlined that government, together with the Reserve Bank of Malawi, will target an inflation rate of 5 percent by 2025.

The local Chancellor of the Exchequer says economic growth in Malawi is projected at 1.9 percent in 2020 and 4.5 percent in 2021.

Mlusu further underlined that the budget has K555.6 billion deficit and they have already engaged donors on budgetary support.

The country’s purse keeper said the economy is currently riddled with fiscal risks including high statutory expenditure as well as high public debt which he said  is now at K4.1 trillion which represents about 60 percent of Malawi’s total wealth as measured by GDP.

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