Minister of Finance, Economic Planning and Development Goodall Gondwe says the 2016/17 National Budget will focus on dealing with the impact of lower agricultural output which could lead to importation of maize within Africa and beyond.
One of the highlights of this year’s fiscal plan is the reduction of financial resources for the controversial Farm Input Subsidy Programme (Fisp) from last year’s K60 billion to around K40 billion to cater for about 900 000 beneficiaries.
Said Gondwe: “The process of synthesising information from our stakeholders is going on well, but we cannot deny that we have some problems.
“Problems are everywhere and our main challenge is to find resources with which to feed the people. Other countries are even going outside Africa to buy food and we will do the same if need be so that people do not starve.”
He said in an interview on Wednesday that with Malawians in rural areas harvesting less maize, there will be need to upscale public works programme (PWP) so that even those without money can afford to buy maize.
“The harvests have not been good this year and we have to put aside resources for the vulnerable. We are also thankful to the Ministry of Agriculture [Irrigation and Water Development] for accepting to have Fisp financial resources reduced because we will also require resources to be channeled towards irrigation at Bwanje [in Ntcheu], along Lake Malawi as well as in the Shire Valley,” said Gondwe.
He said the Government of China and the World Bank have shown interest to provide technical and financial support for irrigation farming.
Gondwe, however, refused to give the budget’s total expenditure and net lending, but said some sectors will face substantial cuts, including allowances for external travel.
Treasury spokesperson Nations Msowoya, in a separate interview, said the information they gathered from all economic players during pre-budget consultations was critical in the formulation of the budget and the process of analysing the submissions is proceeding according to plan.
University of Malawi’s (Unima) Chancellor College economics professor Ben Kaluwa, in an interview on Wednesday, said government’s plan to allocate more money for PWP and irrigation are good initiatives that will help the country to move forward.
He, however, asked government to address the challenge of seed availability and increased usage of the railway system to make the country’s imports and exports cheaper.
“There is need to look at the critical issues of seed availability and transportation. The private sector must be sensitised to make use of the railway more than roads because it will make transportation of goods cheaper,” said Kaluwa.
The budget will be presented against the background of an economy that is tanking due to effects of donor aid withdrawal, dry spells and floods.