Minister of Finance, Economic Planning and Development Joseph Mwanamvekha yesterday hinted that the 2019/20 National Budget will hinge on spurring both domestic and foreign investments while strengthening prudent fiscal management.
Speaking during the first pre-budget consultation meeting for the 2019/20 National Budget in Lilongwe, the minister also said the next budget, which is expected to be presented later this September, will ensure what he called “value for money.”
The fiscal plan will be presented amid rising public debt at $4.3 billion (about K3.2 trillion) or 68 percent of the gross domestic product (GDP), comprising $2.2 billion (about K1.6 trillion) or 34.9 percent of GDP and external debt at $2.1 billion (about K1.5 trillion) or 33 percent of GDP.
It will also be presented at a time budgetary operations in the 2018/19 financial year were riddled with deficits.
Said Mwanamvekha: “The budget will, therefore, focus on promoting domestic and foreign investments, diversification in agriculture, promotion of manufacturing and value addition, investments in energy sector, and ensuring “value for money.”
He said the next fiscal plan will strengthen fiscal management, improve domestic resource mobilisation and ensure debt sustainability in the medium to long-term.
In the next budget, Mwanamvekha also hinted that government will continue with reforms to ensure efficiency in public service delivery.
He called on the private sector to take advantage of the stable macroeconomic environment and invest in growth enhancing and job creation.
The minister also spelt out the need to pursue growth and pro-poor policies guided by the five-year Malawi Growth and Development Strategy (MGDS III) if the country is to achieve its long-term goal of poverty reduction.
The 2018/19 budget was faced with a number of challenges, including the unpredictability of budget support which put pressure on Treasury.
This prompted government to resort to heavy domestic borrowing to patch the revenue gap which increased public debt.
In the year, revenues did not perform as expected on account of unsatisfactory performance of tax revenues and parastatal dividends.
Malawi Economic Justice Network (Mejn) and Economics Association of Malawi (Ecama) presented their input on the budget, emphasising on fiscal prudence and reining in on rising public debt.
A source at Treasury said the 2019/20 budget will likely be pegged at K1.5 trillion with revenue and grants projected at K1.4 trillion.