Minister of Finance, Economic Planning and Development Goodall Gondwe has presented to Parliament the fifth and final budget of the government pegged at K1.504 trillion that represents 28.2 percent of the country’s gross development product (GDP) and unpacked projects and subsequent expenditure programmes clearly aimed at boosting chances for President Peter Mutharika’s ruling Democratic Progressive Party (DPP) re-election next year.
The budgets highlights that Malawi’s economic performance is higher than the average in the SADC region when looking at economic growth. Malawi tops the region with 4.1% GDP*compared to the rest of the countries whose growth forecast is below 2%, including bigger economies such as South Africa.
In 2017, Malawi was again the only country that achieved the highest growth rates in the region.
*2. STABLE ECONOMY WILL STIMULATE GROWTH AND LEAD TO JOB CREATION.*
Stable exchange rate coupled with the low levels of inflation will help the private sector to invest more to boost its productivity for exports, import substitution and job creation.
The government would continue establishing Special Economic Zones (SEZ) in the country, as a tool for attracting both Foreign Direct Investment and Domestic Investment into the industrial sector.
*3. GOVERNMENT CONTINUES WITH SERVICING THE POOR.*
Government is facilitating the implementation of *MAREP Phase 8* which is targeting to electrify *336 rural growth* centres through grid connection, thereby increasing access to electricity in the rural areas. Currently, construction works have been completed in *177 centres*.
Decent and Affordable Rural Housing Project received an *increase of 14.3 percent* in the budget. It is expected that from this amount about *8,000 houses* will be constructed and rehabilitated.
Local Councils Development Budget
An amount of K20.7 billion for Rural Development through Constituent Development Fund has seen an increase in allocation of the budget, this is targeted at community projects and rural development that could service some 300 Area Development Committees.
*4. FOCUS ON MALAWI’S DEVELOPMENT*
The development budget has been increased by *25.6 percent*.
The Agriculture sector, Transport, Education, and Health remain the major drivers in terms of development focus and priority in terms of the budget allocation.
*5. THE YEAR OF THE YOUTH – FOCUS ON YOUTH DEVELOPMENT AND JOBS FOR YOUTH*
Over *10,000 jobs for youth* through the Youth Tree Planting Program.
Qualified *5,000 youth* aged between 18 and 30 years, will be placed in various Ministries, Departments and Local
Councils through the Youth Internship programme. The objective of this program is to equip the youth with knowledge, skills and ethics as a way of nurturing them for a career in the Civil Service as well as in the Private Sector.
*6. GUARANTEED FOOD SECURITY FOR MALAWI*
Due to the natural disaster, armyworm attacks, the overall harvest is expected to experience a negative growth.
To ensure that there is adequate food for the affected households, Government has allocated K20 billion towards maize purchases and distribution.
Farm Input Subsidy Program (FISP) has received an increased budget allocation in the 2018/19 growing season. The program has been allocated K41.5 billion which will reach out to one million beneficiaries for both fertilizer and seeds.
*7. TAX RELIEF FOR LOW-INCOME EARNERS*
Tax-free income bracket under *Pay-As-You-Earn (PAYE) will be increased from MK30,000 to MK35,000 per month* in order to improve the disposable income of taxable salaried persons.
The budget was very balanced and more focused on poverty alleviation, jobs, and economic growth. This is a very difficult balancing act to achieve.
*8. CARING ABOUT CIVIL SERVANTS*
Junior civil servants will get a *20 percent salary increase* while senior civil servants will get 10 percent salary increment.