Chartered Institute of Marketers (CIM) Malawi Chapter has asked members of Parliament (MPs) to discuss the proposed 2016/17 National Budget by carefully balancing their focus on both short and long-term expected outcomes.
Minister of Finance, Economic Planning and Development Goodall Gondwe last Friday presented the K1.1 trillion fiscal plan, of which K965.2 billion (about $1.4billion) will be total revenue and grant or 22.2 percent of the nominal gross domestic product (GDP).
Of this amount, he said K708.8billion will be tax revenue while K66 billion non-tax
Revenue and K190.4 billion will be grants from our cooperating partners.
The minister said compared with the 2015/16 revised budget, tax revenues are projected to increase by 21.8 percent, reflecting a 24 percent jump in nominal GDP.
CIM Malawi President Stanley Mkwamba in an interview on Thursday challenged the members of Parliament (MPs) to rise above the poverty and other socio-economic traps which fundamentally result from poor planning and lack of effective execution of some good plans.
He said: “Budgets come and budgets go, but the outcomes are pretty much the same. If not poverty acceleration then it is wide spread hunger or both.
“It is high time Malawi developed budgets that holistically plan for the future while living in the present. Our budgets should inspire short-term sacrifices of gratification for long term glory.”
Mkwamba said Malawi needs a budget that transcends the limits placed on it by political five-year terms.
He said despite Malawi’s problem being cross cutting with several dimensions, the budget could be a point of departure on a journey towards transformation.
“In most highly industrialised countries such as China, governments boldly and clearly took a lead in showing the populace the beacons of development. Their budgets clearly set in motion development revolution. One thing that characterises our responses to disasters such as hunger, depreciation of kwacha and inflation is lack of long-term solution frameworks and instruments.
“Fisp [Farm Input Subsidy Programme] though agreeably dealt away with the effects of 2005/16 food shortages, has proved not adequate to avert food insecurity associated with rain-fed single cropping of maize in Malawi,” he said.
Mkwamba also took a swipe at monetary authority for failing to tame the kwacha’s perennial fall.
He advised that Malawi needs to go back to economics basics of rewards for economic effort-profit, interest, rent, wages and dividends-saying these are earned for a given activity level.
“The more people earn, the more they consume. Encouraging economic activity should be the key driver for our national budget. Budgets should deliberately design a cob web, cluster by cluster, revolution that could catalyse wide-spread industrialisation,” he said.
Currently, MPs are scrutinising the budget in cluster and thereafter, they reconvene where they will analyse the budget vote-by-vote before they pass it.
This year’s budget has been prepared against the backdrop of various socio-economic challenges facing the country, key among them being the food insecurity crisis occasioned by the El Nino that has hit the country in two consecutive years.
In the proposed budget, besides allocating K117.5 billion to the agriculture sector, government has allocated K35.5 billion to the purchase food within the region and outside. n