2016-2017 Budget: This is IMF Budget - MCP

Goodall Gondwe: Finance Minister 

The K1.136 Trillion Budget presented on Friday for the 2016/17 fiscal year has been described as “IMF budget” and “unrealistic” for how Malawi has projected to raise its domestic resources.

Total revenue and grants are estimated at K965.2 billion where 80.3% of this will be domestically generated while 19.7 percent will represent donor grants.

Malawi Congress Party spokesperson on finance in National Assembly, Alexander Kusamba Dzonzi reacted that Malawians will suffer much through tax revenues as the budget intends to raise 80.3% using domestic resources while as Peoples Party (PP) spokesperson on finance, Ralph Jooma described this years budget as Unrealistic and feared that the budget will be marred with excessive borrowing.

Dzonzi said this will result into real hardships among Malawians and predicted possible high interest rates in commercial banks that will scare entrepreneurs from borrowing there by reducing their production and affect the economy. 

He described the budget as an IMF Budget and not reflection of Malawians needs as the Finance Minister admitted that this year’s budget reflects highly on agreements made between Malawi and IMF.

“This budget is an IMF (International Monetary Fund)Budget” because in almost statement that the Minister was  producing he was referring to what the Government has  agreed with IMF, so it will not speak any the agreement between Malawi Government and the people of this country.” 

“Now the question is how do you expect such an IMF based Budget respond to the to the needs of this country? We were actually expecting that the Minister of finance will present the Budget that is talking about Malawi, the budget that is reflects the thinking of Malawians”

Jooma

Equally, Peoples Party (PP) spokesperson on finance, Ralph Jooma described this years budget as Unrealistic and feared that the budget will be marred with excessive borrowing as spending 1 trillion against available resources of K965 billion creates a huge gap of K70 billion which may be closed through borrowing.

“And what that means is that Government will be increasing domestic borrowing to suffice this gap which will not be very good for future budgets because that that means is that the future budgets will be in danger because more resources will not be available for use by departments and ministries but simply pay the domestic interest loans and that is not good” he said 

Minister of Finance Goodall Gondwe said this financial year budget prioritizes ending of hunger and spur economic growth through intensive irrigation farming and adherence to IMF programmes.

Some allocations in the budget have gone to Public Works Income activities amounting K500 million to each district, National Registration programe with sum of US$51.2 million and double allocation to Higher Education Students Loan and Grant Board to K3 billion as well MK500 million for the councillors’ motor cycle loan facility.

Ministry of Agriculture is getting lions share in this budget with allocation of K198 billion however, Farm Input Subsidy beneficiaries have been reduced to 900 thousand from 1.5 million and also allocation to the programmed has been reduced to MK31.4 billion from last year allocation of K63.9 billion.

Ministry of education has been allocated with K147. 6 billion while Health has an allocation of K95.8 billion.

On hunger expected to affect 8 million people according to Minister of finance, Budget will respond with allocation of K35. 5 billion with K6 billion for the procurement of winter cropping maize harvest from large scale farmers.