Despite a rosy picture painted by Finance Minister Goodall Gondwe, that the country’s economy is heading for a rebound, some commentators have played down such sentiments.
Presenting the Mid-Year Budget Statement to Parliament yesterday in Lilongwe, Gondwe forecasted that economic growth rate could reach 7 percent and inflation rate is estimated at 11 percent this year, against 20 percent in 2016.
But Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira, who was part of members of the private sector that met with the International Monetary Fund (IMF) team early this week, wondered where government officials got the figures.
The IMF on Tuesday projected the economy to grow between 3 and 5 percent, and 7 percent in the medium-term.
Kaferapanjira said he was disappointed with government over expenditure, saying there a is a lot of undisclosed overspending in the budget as evidenced by the K5 billion wage bill pinned on the Malawi Police Service (MPS) and Malawi Defence Force (MDF).
“This is why I am saying the minister has not been open enough to inform the public where the over expenditure is coming from, because if you are spending on very important projects and you are overspending at the same time, and your borrowing is up to 25 percent of GDP [gross domestic product], while the internationally accepted one is only 20 percent, it doesn’t really say anything,” he said.
In the budget presentation, the minister indicated that government will only be able to implement 15 projects at the end of this financial year, out of 85 that were earmarked and that 26 projects will be implemented to a stage where each is visible and the remaining 29 projects will have to be pended into the next financial year.
“That tells you how much attention is not being given to development projects and yet the minister is saying the economy is on track.
“In general, I really don’t think the finance minister has been accountable enough. Our reason for coming here to listen to him was to tell us how much of what he told us last year he has done and what is not happening and why, but there was very little,” the MCCCI head said.
Malawi Economic Justice Network (Mejn) executive director Dalitso Kubalasa also described as “very serious” the setbacks that Gondwe highlighted in his statement.
One being that Capital Hill bailed out State produce trader Agricultural Development and Marketing Corporation (Admarc) with K45.2 billion, which the parastatal owed banks through loans for the purchase of maize.
Kubalasa said the obstacles are likely to have far-reaching consequences in the economy, adding that the hopes by the minister that Malawi Revenue Authority (MRA)—which has under-collected by K45.9 billion in the first-half of the year will collect K70 billion or more in the second-half of 2017/18 as a result of good economic measures—is a far-fetched dream.
European Union (EU) Ambassador Marcel Gerrmann, who attributed the difficult phase the economy is going through to power shortages, said industries cannot produce with inadequate power supply.
He emphasised the need for government to ensure that every kwacha is accounted for and spent wisely in the prevailing harsh economic times if the country is to recover.
“As EU [European Union], we financed a conference last April on corruption, which was also attended by the President, but so far we still haven’t seen a report or recommendations a year later.
“I think it is important if this done if the fight against corruption is to be won in this country.” n