Budget too flat—Gwengwe

Budget and Finance Committee of Parliament chairperson Sosten Gwengwe has described the upward revised K1.8 trillion 2019/20 National Budget as a flop.

He said the financial blueprint fails to highlight progress achieved in the first-half.

Reacting to Minister of Finance, Economic Planning and Development Joseph Mwanamvekha’s  Mid-Year Budget Statement at Parliament yesterday, Gwengwe said the minister was supposed to provide a detailed account of the performance of the budget sector by sector.

The former minister of Industry and Trade further observed that the revised fiscal plan does not respond to the needs of the economy.

He said: “Our expectation was that he was going to report progress, but he just reminded us what was promised six months ago. There is not much progress reported, it is all about ‘we are working on this, we are working on that’.”

Gwengwe also quashed the minister’s repeated emphasis that the post-election demonstrations affected the performance of the economy, saying the technocrats needed to plan better as these events were anticipated.

But economist Kettie Nyasulu, who is acting executive director of Economics Association of Malawi (Ecama), praised Capital Hill for spending within the budget in the first-half of the 2019/2020 financial year.

“Given the hostile economic environment that prevailed in the past few months, it is commendable that government has been able to operate within available means,” she said.

On financing elections, Nyasulu agreed with the minister that it will not come cheap given the pressure facing the economy.

Mwanamvekha spoke with repeated emphasis on how difficult it will be to finance what he called “probable fresh presidential elections”, citing fiscal pressure.

His repeated statement met disapproving murmurs, especially from opposition benches who are eager for a fresh election.

The minister provided two possible options to raise the elections budget pegged at K29 billion to either raise borrowing or cut expenditure on some equally important sectors.

Nyasulu observed: “We know that almost all sectors are underfunded and considering the current political environment, we know that the businesses are not doing fine, there is indeed that pressure on the government. Given the two options the minister showed, we are really in a fix.”

Asked on what she considered a better option, Nyasulu settled for borrowing to avoid budget cuts from the already underfunded sectors.

But Gwengwe downplayed the pressure in funding the elections, advising government to use resources within the budget.

According to the Leader of the House Kondwani Nankhumwa,  opposition political parties in the House will respond to the budget statement on Monday next week followed by the Budget and Finance Committee before general debate opens.