Malawi Economic Justice Network (Mejn) has said while the proposed K1.5 trillion 2018/19 National Budget “bravely attempts to do everything”, it still remains heavily constrained in the face of many competing priorities.
In a written response to a questionnaire on Friday, Mejn executive director Dalitso Kubalasa said going by the recent poor revenue performance, risks still remain quite high.
He said much as there are recurring challenges in revenue generation, there are still huge spending problems overshadowing public finance management systems that need to be dealt with.
Said Kubalasa: “The revenue realities and trends for starters should serve as a trigger point for more policy reforms action and extreme caution to government. They need to be focused on the tax and non-tax administration systems as well as the broader public finance management systems that are still in urgent need of overhaul.
“Government needs to systematically and urgently continue pursuing the quest for making economic independence a reality, through much enhanced domestic resource mobilisation, rationalise revenue allocation and prudent resource utilisation.”
Kubalasa observed that there is nothing much outlined on how government intends to address the energy crisis in the 2018/19 fiscal plan.
“The challenges dodging our energy sector have been well chronicled. The sector’s importance cannot be overemphasised as it is at the core and probably the most binding of all our constraints in the economy.
“The underlying constraints to enhancing the competitiveness and economic productivity are still more astounding,” he said.
At K1.5 trillion, the budget is 13 percent higher than the K1.1 trillion 2017/18 revised budget. The proposed budget also represents 22.8 percent of gross domestic product (GDP).
Minister of Finance, Economic Planning and Development Goodall Gondwe has given Malawi Revenue Authority (MRA) a tax revenue target of K940 billion while K112.2 billion will be generated through non-tax revenue.
He said in the 2018/19 National Budget Statement that government will also introduce other reforms in revenue policy and administration, public procurement, accounting and financial oversight to ensure efficiency and transparency in public finances.
Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe also expressed surprise at government’s assumption to grow revenue considering the challenges. n