Crunch time as budget review meeting looms

Within the next two weeks, members of Parliament (MPs) head to Lilongwe for the Mid-year Budget Review Meeting.

While there, they will listen to Finance, Economic Planning and Development Minister Goodall Gondwe reporting on the troubled 2015/16 National Budget.

Gondwe will give the Peter Mutharika administration’s updates for the Democratic Progressive Party’s (DPP) led-government outlays, receipts and the budget deficit in the context of economic, legislative and other changes during the first six months of the current budget, which can also inform the fiscal and economic outlook for the remaining half of the financial year.

Thus, when the House meets, the country will also have the opportunity to get updated information on the fiscal and economic outlook—both of which are depressing, and that is putting it mildly.

In addition, Treasury is also likely to provide latest updates for forecasts of major economic parameters such as projected inflation rates, interest rates, public debts, exchange rates and gross domestic product (GDP).

But this will be one of the most difficult tasks for Gondwe. On the other hand, it is also a litmus test of the relevance of the Budget and Finance Committee of Parliament and the House in general.

I am really looking forward to how MPs will tackle the fiscal crisis that has crippled Capital Hill, the government architecture generally and Malawian citizens.

Can our MPs make tough choices for the sake of the economy and the people’s livelihoods?

Will their quest for political survival trump the needs of the greater good? Can our MPs—especially on the government benches comprising DPP, United Democratic Front (UDF) and those legislators that caucus with the ruling party—stand up to Treasury and State House or they will pander to their political godfathers even as the policy prescriptions are ridiculous?

Can our leading opposition parties—especially Malawi Congress Party (MCP) and People’s Party (PP)—stop looking at such serious issues as the national budget from a partisan prism and start looking at them as serious national problems requiring sober national solutions?

In other words, can we finally achieve bi-partisanship on issues that matter to everyone rather than just agreeing on what matters to the legislators such as perks increases and Constituency Development Fund (CDF)?

This country has serious problems. There are five pressure points I would like the MPs to look at seriously during the upcoming budget review.

The first is the hunger situation, which has left 2.8 million people in desperate need of food aid.

We need bold short and long term policy measures to tackle the problem of perennial hunger, especially whenever there is drought or floods.

Legislators should also invest time on the issue of access to food as well as ideas on how the country can diversify its food menu.

The second issue is: How can we use the national budget to revive the economy? Real gross domestic product (GDP) is projected to grow by just three percent in 2015 from 5.7 percent in 2014 on the back of low agriculture output, damage caused by floods, tight public spending and private sector underperformance in a hostile macroeconomic environment.

What should be factored in the remaining half of the budget to breathe some life into the economy?

Third, prices are rising sharply. What supply and demand side measures should be considered to bring down the rising inflation rate and stabilise the exchange rate that has made life unbearable for the majority of Malawians, destabilised businesses and thrown the government budget off balance?

Fourth is the element of underfunding to government ministries, departments and agencies (MDAs) largely due to weak revenue collection by the Malawi Revenue Authority (MRA) as well as the near lack of direct budgetary support.

What policy approaches should the country explore to improve revenue from both external and domestic sources to balance the budget or at least narrow the financing gap?

The fifth one is more vexing. At the end of its Article IV review mission to Malawi last September, the International Monetary Fund (IMF) made clear that there must be budget cuts to bring sanity to public finances and have a realistic budget.

I hope that MPs will put Gondwe on the spot on whether he has identified areas where there is wasteful spending so that it cut be curtailed.

I pray the MPs will come up with their own areas where there should be drastic programme scale-backs so that funding goes to prioritised sectors such as health and education.

And most importantly, the Executive should have the strength to listen and learn from all voices even when it hurts. Malawi is at cross-roads. Only pragmatism—not ideology and narrow partisan political interests—will show the right direction.