Hon Folks, last year the original budget was K1.2 trillion but had to be reduced later when it became apparent that government’s narrow revenue base could not yield that amount of money.
This year the outlook is promising: good maize harvest and other crops, thanks to the good rains and minimised crop damage by locusts and army worms. Government’s thrift spending measures, despite the controversy on prioritisation of allocations is, like a mango tree, in a season for flowering.
But flowers are flowers, not the anticipated fruit. You still have to wait for a while longer before you can savour the succulent fruit. This is probably the reason why, despite that the population has grown by nearly 3 percent and that inflation has somewhat eroded the purchasing power of the kwacha, the budget isn’t much different from last year’s.
When government takes away from the budget the growing chunk required for paying and appeasing its ever disgruntled workers, set aside another huge chunk for financing the Hollywood lifestyle of the President and his cronies and allow for 30 percent of the revenue to be lost to corruption, much less than last year will be left for the provision of public goods and services to the growing population.
Folks, I submit that a single parent of many children who’s entangled in the cobweb of abject poverty will most likely attract a hopeless suitor with nothing better to offer than aggravating the miserable life of deprivation.
Likewise, corrupt governments with poor infrastructure and broken education and health sectors will most likely be seen as a safe haven for drug barons and money launderers. Serious investors—and donors for that matter—tend to prefer investing where they can get value for money.
If it’s true that donor fatigue is a reality, it’s also equally true to say donors are more attracted to countries such as Rwanda with potential to use aid and own resources effectively than countries with as weak internal systems as Malawi. Simply put, the mere fact that we are up to the neck in abject poverty is not sufficient justification for aid.
I never lived a moment to doubt the potential of our economy to grow and become less dependent on aid and more dependent on trade. We all also know that it is indeed, a possibility. During Bingu’s first term aid and our resources were used prudently to grow the economy.
But that opportunity plus many other opportunities before and after it were botched. Today, we are saddled with growing debts, rocked in natural disasters, soaring population and erratic rainfall patterns.
As some have pointed out, we need substantial investment in irrigation and modernise our farming for us to be food secure and increase the potential of agriculture as an employer and export earner. We need substantial investment in education if we are to reverse the ever deteriorating education standards.
It’s an open secret that our public health system will collapse if donors walked out on it the way they did with the direct budgetary support.
Simply put, the question we should be asking ourselves is: considering that we are virtually back to the status of a heavily indebted country, how do we get the capital to invest in the growth of our economy?
The Centre for Social Concern (CfSC), a non-governmental organisation that champions the cause for the poor, came up with a pre-budget suggestion that extending the 0 percent tax-band to K80 000 while increasing tax to 35 percent for the K500 000 to K1 million and to 45 percent for those earning above K1 million will help reduce income inequality which negatively affects economic growth.
I am saying these folks are jumping the gun. Take away those earning up to K80 000 and you simply “nationalise poverty” to quote poet Taban Lo Liyong. Government will not raise enough revenue while demand for its services will increase.
I think a good starting point is regaining donor confidence by doing more on economic governance on the one hand while helping the small-holder farmer earn fair prices for their sweat, on the other. Next week, I will share my take on how the massive energy of the rural folks is bottled up in politics of patronage and handouts. n