Opposition casts doubt on economy

Opposition political parties yesterday took turns in punching holes into the revised 2016/17 National Budget and casting doubt on figures Minister of Finance Goodall Gondwe presented to Parliament on Friday.

The parties, through their members of Parliament (MPs), said the new budget lacks concise and prudent economic foresight as it was formulated under pressure.

Gondwe on Friday announced the revised budget, claiming that the country’s economy was on a rebound. He cited a reduction in both monetary and food inflation as key indicators to back his conclusion.

However, when they responded to Gondwe’s Mid-Year Revised Budget Statement, the opposition parties said the country has been hijacked by demons and is experiencing State-sponsored corruption which it has no idea as to what should be done to deal with it.

Making his presentation, Malawi Congress Party (MCP) spokesperson on Finance, Alexander Kusamba Dzonzi, said the country continues to decline with no remedy in sight.

He argued that high interest rates, high unemployment rates, high crime rates, high inflation rates, poor road infrastructure, high mortality rates, drug shortages in hospitals, electricity blackouts, shortage of piped water and untimely closures of universities coupled with the Zambia/Agricultural Development and Marketing Corporation (Admarc) Maize Scandal are among the factors messing up the economy.

“Mr Speaker Sir, it is now becoming evident that our democracy has been hijacked by some demons,” he said.

Dzonzi said it is shocking and distressing for his party to note that Gondwe deliberately decided to present to the august House a picture of an economy doing well when everybody, including the minister himself knows the truth that our economy is actually withering and shrinking at an alarming rate.

On his part, Peoples’ Party (PP) spokesperson Ralph Jooma said the budget is under pressure from payroll, interest charges as well as maturing promissory notes.

“The first half of the budget has not helped to fight against poverty. Of course, money has been collected from the rich. In fact, over collected to a certain extent but this money has not trickled down, instead this budget has subjected our people to wallow even more in the shackles of poverty,” he said.

Jooma also pointed out that the good rains are a lost opportunity because rainfall has not been complemented with input supplies.

On health, he observed that with the K1.1 trillion budget, government could not buy a bag of cement to continue with the construction of Umoyo House and Health Centres whose construction stalled two years ago.

Jooma explained that there are a myriad factors that have to be right for the economy to grow and that production must not only be in the field, but also in the factories.

“We wonder how we could be processing and adding value when our interest rates are as high as 40 percent for banks and over 50 percent for micro finances. How can we grow when the country is not attracting any FDI [Foreign   Direct Investment] in agroprocessing and we allow foreign investors to engage in petty trading? Mr Speaker Sir, time has come when we have to make tough decision and make life difficult for foreigners engaged in petty trading,” he said.

Jooma further said the decline of 18.2 percent in inflation, which Gondwe bragged about, has been caused by the flooding of humanitarian food in the country, adding that the price of commodities like groceries have been increasing each and every day.

“Mr Speaker Sir, there’s no reason to rejoice over a decline of inflation that has been caused by proliferation of disaster food when the price of all other commodities are still going up,” he said.

In his response, Budget and Finance Committee of Parliament chaiperson, Rhino Chiphiko expressed the committees’ concern on the increase in interest rates which he said will further exert pressure on the budget.

“At the moment, the increase projection in interest rates is hovering around K25 billion. This is a lot of money which Malawi cannot afford to lose,” he said.

In an interview, Chancellor College economist Ben Kaluwa said Gondwe knows the truth as to how the reduction in inflation has come about and it has nothing to do with government efforts.

According to Kaluwa, reduction in inflation is a result of development partners who are coming in to support the country’s food situation which he said was the major cause of low inflation in the country.

“Everybody knows that donors are pumping in money  to support the food crisis and the  inflation he is talking about [is] seasonal, why can’t the Minister of Finance Gondwe say the truth?” said Kaluwa.