Mwanamveka responds to national budget statement, claims ‘Pa Ground Sipali Bwino’

DPP Spokesperson on Economy and Finance Joseph Mathyola Mwanamveka has said ‘pa ground sipali bwino’, now a popular local parlance in reference to the economic suffering that Malawians are going through.

He said this on Monday, June 14, 2021 when he officially responded to the national budget, which was delivered in Parliament by Minister of Finance Felix Mlusu on May 28, 2021.

Mwanamveka tore apart the budget, arguing many of the assumptions the Minister of Finance made have been sugar-coated and not reflecting the true situation on the ground. He described the budget as consumptive; unrealistic; debt-ridden; unfriendly to the private sector and not aligned to the Malawi 2063 vision as claimed by the Minister.

“Madam Speaker, this budget is also unrealistic because the projected exchange rate of 780 Malawi Kwacha to the US dollar is unachievable. As we speak, the Malawi kwacha is trading at over 800 Malawi kwacha to the US dollar in the official market, while trading at over 900 Malawi kwacha to the US dollar in the parallel market. The Minister has not explained to us as to what measures government will pursue to allow the Malawi kwacha appreciate back to 780 to the US dollar,” said Mwanamveka.

He added that another thing making the budget unattainable is the fact that tobacco prices are low at the Auction Floors this year which will make it very difficult for the country to earn enough foreign exchange from the green gold. On top of this, he said, it is difficult for the country to rely on maize exports because most of Malawi’s neighbouring countries have produced a maize surplus of their own, which they are selling at even lower prices than Malawi.

Mwanamveka, who served as Finance Minister in the previous DPP government, said this scenario will most likely result in negative balance of payment, which will further be exacerbated by low and unpredictable donor support. He added that it is difficult under the circumstances to stabilise inflation and the Kwacha exchange rate in the short to medium term.

“As we speak now, importers are stranded without any clue on what to do. The Malawi Kwacha exchange rate is depreciating every day and as a result prices are going up everyday thereby eroding people’s purchasing power,” said Mwanamvekha, wondering how the Malawi Kwacha will appreciate back to K780 to the United States Dollar.

He said the budget is consumptive because recurrent expenditure alone accounts for 71% whilst development budget accounts for only 29% of the total budget.

He added that to say the budget is aligned to Malawi’s vision 2063 is also misleading because it has only allocated 16.5 % to the three key pillars of the Malawi 2063 vision namely: Agriculture Productivity and Commercialisation; Urbanization and Industrialization, which he said was too low to be described as being aligned to the Malawi 2063 blueprint.

NEEF loans

On youth loans from NEEF, Mwanamveka said in the 2020/2021 budget, government allocated 40 billion kwacha to NEEF to be disbursed as loans to support the creation of 200,000 enterprises run by the youth and women. He however wondered where the funds have gone because in his statement the Minister of Finance said NEEF has only disbursed 6 billion to 2,700 groups.

Said Mwanamveka: “Looking at what is happening on the ground, it is even doubtful that over 2,700 groups benefited because the beneficiaries cannot be traced. We do not believe NEEF has disbursed loans to 2,700 groups; this is a lie Madam Speaker. Even if you did disburse, why only 2,700 groups when you had promised to disburse to 200,000 groups in the last fiscal year? Perhaps we should ask the Minister,where are these 2, 700 groups?”

He also demanded of the Minister of Finance to produce a list of beneficiaries categorised by district and by region, and also to come out clear as to how much will be disbursed this fiscal year and also assure the august house that it will not only be MCP members who will benefit from loans from NEEF.

On the Duty-free Week, Mwanamveka chided the Tonse Alliance government for introducing tax measures that he said were already introduced by the DPP government.

He said what the minister has proposed on duty-free week was already introduced by the DPP under the COMESA Simplified Trade Regime, adding that under this regime, cross border traders are already allowed to import goods of up to US$3,000 duty free.

“Can the minister, therefore, explain how the duty free week will operate, particularly when the DPP already covered this under the COMESA simplified trade regime? My suggestion, Madam Speaker, is for the Minister to add this additional $3000 to the already existing amount to make it $6000. If it is left as it is Honourable Minister, then you are cheating Malawians for promising them what DPP had already provided,” said the DPP Spokesperson on Finance.

Tax clearance for employment

He also had something on the proposal by government to introduce tax clearance for people seeking public office.

“Madam Speaker, Chapter 6, Sub-section 51 of the Constitution of the Republic of Malawi clearly stipulates the requirements for anyone seeking public office. Any move by government to introduce extra measures is, therefore, suspicious and must be treated with contempt,” said

Mwanamveka whilst advising the Minister to remove this requirement on top of requesting his fellow MPS to reject the proposal.

He told the House that Malawians are suffering, and cannot afford to buy basic commodities like soap, cooking oil, salt, matches to name but a few. The prices of most of the commodities are going up almost on daily basis.

“Vendors and Kabanza operators in all our cities are struggling to put food on their table.

“Most of the employees in our cities are not able to pay rent and are walking long distances to their work places. Honourable Minister, when you see people walking in the morning and evening rush hours they are not doing exercises, but rather it is because they cannot afford transport fare,” he said.

In conclusion, Mwanamveka assured Malawians that “life will get better once the DPP comes back to power in 2025”.

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