Invest In Large Scale Farmers - Opposition Parties

Opposition Parties in the National Assembly says Malawi can eradicate its perennial food shortages if Agricultural programs and resources are invested to large-scale farmers and not resource poor farmers.

The observation follows US$60 million loan authorization bill on International Fund for Agriculture Development Programme for Rural Irrigation Development which has been passed by Parliament on Tuesday evening where the main beneficiaries in the loan are 19, 500 poor households from number of districts across the country particularly in most areas affected by drought and 12, 300 hectares will be under irrigation through the project.

House Approves US$ 23.5M Loan To Improve Water Supply For Blantyre City

No more dry taps

Problems of intermittent water supply facing Blantyre City will soon come to an end with the passing of US$ 23. 5 million loan for the purpose of putting water infrastructure at Mulanje Mountain to supply water to Blantyre city residents.

On Monday afternoon, the National Assembly approved Bill No. 15 of 2016: Export-Import Bank of India Loan Authorisation authorizing Government to get money for improving water provision in Blantyre city including some rural areas in Mulanje and Thyolo.

Parliament Pass 2016/17 Appropriation Bill, Customs & Excise, Taxation Bills

On Friday, the National Assembly passed Bill No. 27 of 2016 Appropriation following passing of the 2016/17 National Budget by the House on Thursday night.

The House pass Appropriation bill without debate and amendment to formally allow Government to appropriate resources in form of taxes for the resources to fund the activities of the Government.

Low Paid Civil Servants To Get A Raise

Minister of Finance, Economic Planning and Development has increased budgetary allocation to the Department of Human Resource Management and Development with K7.7 billion in order to allow lower paid workers in civil service to get better salaries. 

Finance Minister Goodall Gondwe told the National Assembly during the Committee of Supply before the passing of 2016/17 budget that the increment has been made to avert possible strike if workers continue to get little salaries. 

CDF Allocation Increased To K18 Million Per Constituency

There was jubilation in the National Assembly during Committee of Supply when Finance Minister, Goodall Gondwe announced that Constituency Development Fund (CDF) to each constituency has been increased to K18 million from K12 million.

CDF is under National Local Government Finance Committee budgetary vote and Members of Parliament were proposing increment of K20 million allocation per each constituency from K12 million. 

But the Gondwe earlier told House that Government was willing to raise CDF per each constituency from K12 million to K15 Million. However, the Finance Minister motion was defeated and the Committee of Supply deferred the vote forcing the Minister to make further consultation. 

2016/17 Budget Increased To K1.149 Trillion Now Passed

Goodall: Presented Budget on 27 May 2016

The 2016/17 National Budget has been passed on Thursday night by the National Assembly but the budget figure has now been increased to K1. 149 trillion from K1.140 trillion following the introduction of new budgetary allocation vote for the Greenbelt Initiative and increment made to Department of Human Resource Management and Development by K7.7 billion

Greenbelt Initiative which has just been created by Government is a new vote which has received an allocation of K300 million. It was omitted on the Order Paper until it appeared on Thursday night when Government presented Supplementary Order Paper.

National Assembly Budget Increased by K1 billion

Minister of Finance has increased the National Assembly budgetary vote by K1 billion after legislators had on Monday deferred the vote saying it was insufficient to enable committees of the House to carryout their oversight roles.

The National Assembly vote was initially allocated with K9. 410 billion and with the change the vote has increased to K10. 410 billion.

FISP Allocation Increased By K3.5 Billion

Government has increased budgetary allocation to the Farm Input Subsidy Programme (FISP) with K3.5 billion raising the figure from initial K31. 4 billion to K34.9 billion.

Minister of Finance, Economic Planning and Development informed the Committee of Supply that the increment has been made following increase in the market price of fertilizer commodity.

Govt Allocates K500 Thousand To Prisons For Agriculture, Expansion Of Cells

Prisons will in the 2016/17 financial year receive K500 thousand for the agriculture to enable prisoners produce food for themselves and for the buying of some few building materials to support the expansion of prison cells.

Minister of Finance and Economic Planning, Goodall Gondwe indicated that the allocation is seed money to be shared by most of the country’s prisons to enable them buy fertilizer to support their farming activities and to enable the most congested prisons particularly Maula Prison in Lilongwe to procure construction materials like cement to support the expansion of cells.

Legislators Wants Wants National Assembly Budget Increased To K12 Billion

The Parliamentarians welcomes Finance Minister's decision to defer national budget allocation of K9.410 billion for the National Assembly to allow further consultation as the House wants the allocation raised to K12 billion.

As the House began Committee of Supply where the whole House is considering and passing the budget votes for 2016/17, Legislators have argued that K9.4 billion it is not enough to allow the committees of the House to play oversight function on several issues including that Government is promising Malawians.

Govt Okay MPs General Purpose Fund Loan Implementation

Negotiations on the implementation for the General Purpose Fund (GPF) loans of Members of Parliament are finally over as Government has accepted full implementation of the loans, Minister of Finance and Economic Planning confirm.

A welfare committee has been negotiating with Government through minister of Finance on implementation of the personal loan facility amounting to K5 Million for each Member of Parliament, a package which includes funds for motor vehicle, general purpose funds and emergency.

2016/17 National Budget Scrutiny Ends Today

The cluster Parliamentary Committees scrutinizing the 2016/2017 Budget are finalising today analysis of budgetary allocations to various ministry's and departments.

Finance Minister, Goodall Gondwe presented K1 trillion budget on 27th May 2016 a budget which is prioritizing agriculture.

2016-2017 Budget: Estimates At K1.136 Trillion

Minister of Finance and Economic Planning has told National Assembly that this 2016-2017 Financial Year Government will spent a total amount of K1, 136.4 billion (One Trillion, One Hundred and Thirty Six Billion point Four)

This total expenditure and net lending during this year represents 26.1 percent of nominal GDP.

It also represents an increase of 23.9 percent over the 2015-2016 revised expenditure of K902.3 billion.

Among others this budget will allocate K198.5 Billion to the Ministry of Agriculture, which is the highest allocation of resources for this year, and K147.6 Billion for Ministry of Education and K9.8 Billion for the Ministry of Health.

This large allocation to Agriculture comes at a time when the Government has resolved to intensify irrigation farming in order to transform the economy from the excessive dependence on rain-fed agriculture, as a lasting solution to the challenge of climate change.

"The move will also increase the number of harvests per year to more than the current single harvest. This could substantially increase the country’s rate of economic growth." indicated Gondwe

He mentioned that the large scale farming will be intensified through Green Belt Initiative and that Government has decided to formally establish the Greenbelt Authority (GBA) as a stand-alone public agency.

"The authority will be the official agent for the construction of these largescale irrigation infrastructural projects throughout the country in line with the Government’s Irrigation Masterplan, while small-scale irrigation projects will continue to be implemented by the Ministry of Agriculture, Irrigation and Water Development." He said

"Accordingly, the Treasury has established Vote 078 to allocate resources for the administrative and operational expenses of the authority with immediate effect. This will be part of the 2016/17 budget. The large-scale irrigation infrastructure projects will be part of the Government’s development programme." He assured

Of the projected K1.136 trillion, recurrent expenditure will be MK815.5 billion or 18.7 percent of GDP, which is higher than the 2015/16 allocation by 16.8 percent.

According to Gondwe, the Development expenditure will increase by 57.0 percent from MK217.5 billion to MK317.4 billion, or 7.3 percent of GDP.

"Up to K279.8 billion or 82.2 percent of the development budget will be provided by development partners through loans and grants, while local resources will account for the balance of K37.6 billion or 11.8 percent. Therefore, the donor contribution to the development programme is anticipated to increase by 62.0 percent relative to 2015/16." He said

The total revenue and grants during the 2016/17 fiscal year are estimated at K965.2 billion or 22.2 percent of nominal GDP.

Of this amount, some K708.8billion will be tax revenue, K66.0 billion will be non-tax revenue, while K190.4billion will be grants from Malawi's cooperating partners.

"Thus, MK774.8 billion or 80.3 percent of these resources will be domestically generated, while the remaining 19.7 percent will represent donor grants. " he said the Finance Minister

He went on "Compared with the 2015/16 revised budget, tax revenues are projected to increase by 21.8 percent, reflecting the fact that nominal GDP, which is the base for most of the taxes, will grow by 24.0 percent. Tax on income and profits will account for 55.4 percent of total tax revenue, while tax on goods and services will generate 37.2 percent." He said but noted that non-tax revenue is shown to be lower relative to the 2015/16 revised budget estimate of K71.9 billion.

Gondwe mentioned that three key factors and priorities were taken into account when preparing the 2016-2017 budget.

He named the key considerations as putting reflection of agreement between Government and IMF within the context of seventh and eighth reviews of Extended Credit Facility arrangement; assumptions that macroeconomic outlook for the next financial year, where the real GDP growth is projected at 5.1 percent while nominal GDP will grow by 24.0 percent and that the average inflation rate in 2016/17 is projected reach 17.4

The other key consideration was that based on the Government’s short and medium-term policy priorities which are motivated by the objective of ensuring that the country maintains a program with the IMF, while addressing some pressing socio-economic challenges.

On maintaining IMF programme and addressing socio-economic problems, Gondwe therefore indicated that the budget seeks to increase domestic resource mobilization; make available adequate resources for maize procurement, and to support irrigation farming; to ensure that the wage bill is maintained below 7 percent of nominal GDP; and to ensure that resource allocations to the health, education and other critical social sectors remain adequate and a significant proportion of the budget.

2016-2017 Budget: K35.5 Billion For Food Purchase

Government has announced that the 2016/2017 Budget has allocated K35. 5 billion for the purchase of food response.

Minister of Finance and Economic Planning, Goodall Gondwe has announced today when presenting the 2016/2017 Budget estimates.

"Of this amount, MK6.0 billion is in support of the winter cropping initiative to purchase maize from large scale farmers through contract farming." He indicated  

"The total allocation for maize procurement is additional be pleased to note that development partners cooperating under the Multi-Donor Trust Fund in Agriculture have indicated that they may provide additional resources specifically in support of winter cropping." Said Gondwe

He said ADMARC is also purchasing local maize for immediate sales with support provided through Government guarantees for ADMARC to borrow from commercial banks to purchase food for sales to the public.

Hon. Gondwe mentioned that the U.K. and the ADB already pledged their support in response to President Peter Mutharika's disaster call and that United States Government has already pledged support amounting to about US$63 million for humanitarian food assistance, which will be managed by the World Food Program (WFP). In addition he said the ADB has also pledged US$18 million.

He said other support for food crisis will come from Chinese Government who pledged over US$9 million and from the Japanese Government of US$7 million.

But he noted that the IMF has also provided support amounting to US$49 million through the Augmentation of Access facility, which allows the Government to borrow more money from the Reserve Bank of Malawi specifically for this purpose. He added that the World Bank currently conducting a post disaster needs assessment in the country, to determine their level of support through the Crisis Response Window facility a facility that was used by the World Bank to provide support amounting to US$80 million in response to the flood disaster of 2014/15.

Gondewe also mentioned that through resource support from European Union and the World Bank, each district has been allocated with K500 million in this financial year towards Public Works Programme in order to boost rural income among smallholder farmers in rural areas to enable the buy food. He noted that it is clear that people in rural areas have had drastically reduced agricultural production due to the drought, and that their incomes have also been reduced.

The second round crop estimates recently released by the Ministry of Agriculture, Irrigation and Water Development showed that maize production during the 2015/16 growing season has declined by an estimated 12.4 percent relative to production in 2014/15. 

Maize production has been estimated at 2.4 million metric tons. It is estimated that the country requires an additional 790,000 metric tons of relief food to support an estimated 8.4 million people. An additional 250,000 metric tons is required for sale in ADMARC markets, while another 250,000 metric tons is required to restock the strategic grain reserves.

Get 2016-2017 Budget Statement here 

This Is How Malawi National Budget Will Tackle Food Situation

A Sneak Peek Into 2016/2017 Budget 

The 2016/2017 National Budget will have more cuts on some expenditures to allow more funds to be used to subdue the hunger situation the country is facing.

Goodall Gondwe

Goodall Gondwe, Minister of Finance and Economic Planning is expected to present the Budget in few weeks time as Third Meeting in the 46th Session of Parliament to consider the 2016/2017 Budget begins this Friday, May 20 and will end on Friday, July 8, 2016.

Malawi requires close to 1.3 million metric tons of staple food following the persistent drought which has reduced the 2016 maize production by 12 percent less than previous season.

“This time as far as food is concerned we have three problems” he said mentioning low food production as first problem

The second problem he said Malawi will probably be forced “to go much further perhaps even outside Africa to import food” because neighboring countries like Zambia including South Africa that used to sell food to Malawi when faced with similar situation are also short of food this year.

“The third problem is that because people have not produced enough food they haven’t had much to sell and therefore they do not have enough money in the pocket. When we bring food in the country it will have to be sold and our people may not have enough money” he said indicating “We will have to find ways of getting money to the rural areas for example the budget is going to be concerned with that also.”

“Well, we are going to do something about all these three problems; there are problems that have to be solved, it means also that some of the things that we always do we may have to reduce a little so that we can get food for people to eat”

Malawi Govt Gets Food Worth US$ 10 Million, 100 Vehicles From Chinese Govt

In showing good relation, the Chinese Government on Wednesday signed with Malawi the provision of humanitarian food and grant of 100 vehicles to Malawi Government.

China will provide rice worth 10 Million USD to Malawi for humanitarian food response to people who are experiencing food shortage due to dry spell caused by El Nino while the vehicles are to be used in the Malawi Police Service to combat crime.

Wang Shi Ting

 

The Chinese Ambassador to Malawi, His Excellency Wang Shi Ting made the signing at Capital Hill in Lilongwe together with Goodall Gondwe, Malawi’s Minister of Finance and Economic Planning.

Former VP Kachali, Kamlepo, Makowa Mwale Questions Put On Hold Until President Avail In The House

The Malawi former Vice President, Khumbo Kachale, Kamlepo Kalua and Everson Andrew Makowa Mwale have joined opposition leader, Lazarus Chakwera by reserving their questions until President Peter Mutharika finds time to avail himself in the House to answer their questions.

Questions directed to President from both Kachali legislature for Mzimba South-West and Kamlepo for Rumphi East are on status of food situation in the country while question from Makowa Mwale for Nkhotakota-South East is on progress to identify a cash crop that replaces tobacco.

Minister of Agriculture, Allan Chiyembekeza was delegated to answer the questions although they were seeking direct reply from the President in the House.

Before reserving his question on Friday afternoon just before the House moved the motion to adjourn Sine Die, former vice president Khumbo Kachali sought guidance of Speaker of the National Assembly, Richard Msowoya if the President act to delegate Minister was not contravening Standing Order of 2013 (201) "Where the President is required to respond to questions in accordance with the provision of section 89 (3C) of the constitution he or she may not delegate such functions to a member of Cabinet." 

However, Speaker guided Kachali that the cited section of Constitution provision, chapter 89 .3 further indicates that the President shall respond to questions only when he is addressing the House each year before the consideration of the official budget where he report on the future policies of Government and the policies of the previous year.

“That is what in Parliamentary language is termed as State of the National Address. And during that time the President shall not delegate questions." He said, "Under any other provision, whether the House does request the president to come through resolution or would like the president to come at any point to answer a question not related to provision 89 .3, he is allowed to delegate the questions.” Clarified the Speaker

Accepting the ruling by the speaker, Khumbo said "I will reserve my question until when I see the President in this Honorable House. I know he is a busy person but he will find time"

Kalua: President not to Minister 

When time came for Kamlepo Kalua to ask his question, he  stood to say; "My question is to ask the President not a Minister, to explain to the Nation, the President not the Minister, through this House about the food situation in this country. The President, not the Minister." He said, "And I will go with the decision of the other two speakers that it will be a waste of time for me to ask the Minister when I said the President... this question is directed to the President..."

Nkhotakota South East, Everson Andrew Makowa Mwale also opted to chose the decision made by Kachali and Kaua.

“What Nkhotakota-South East was looking for is HE's perspective" he said, "If the Minister replies, there will be some supplementary questions that honorable ministers will be in a position to consult the President to get his perspective on those supplementary questions so I therefore I would like to pend my question until the President avail himself to answer it"

On Wednesday, Leader of Opposition, Lazarus Chakwera also reserved his question to President on the same reason that he would rather wait until such a time the President avail himself in the House to answer the question. 

These reactions prompted Minister of Health Peter Kumpalume to ask Speaker if the House would prefer the President to write response then read in the House by the Minister and if the House feels that the Ministers are too general to answer questions.

Responding to the first question the speaker's said, that will be another form of delegating question.

But the Finance Minister, Goodall Gondwe also stood to express point that it would not dignify the President to come in the House to answer questions because there would be some follow up questions that may just be asked to humiliate the President.

PP Says First Half Of 2015/16 Budget Underperfomed

Jooma

The opposition People's Party (PP) says it does not agree with Finance Minister claim that the the performance of budget in the first half of 2015 to 2016 fiscal year was good.

When delivering Midyear budget statement in the National Assembly, Finance Minister Goodall Gondwe informed the House that "The performance of the budget this year has been better than before except for the projected expenditure on FISP." 

He said the bulk of expenditure on FISP relates to the imports of fertilizers and in view of the escalated deep depreciation of the currency and the cost of procuring fertilizers.

However, People's Party spokesperson on finance matters in the National Assembly, Ralph Jooma said the performance of the first half of the budget was not all well.

“Am not of the same view, because the minister has already stated that he has underperformed on FISP side by K26 billion. So, that means that the Minister will have to be forced to borrow domestically in order to pay for the FISP.

If you have got arrears it doesn’t mean that you are performing well, if you haven’t spend and yet you are owing your people, is just a question of when you are going to pay them. So it’s not performing well it’s actually just a postponement of an underperformance.” 

Opposition PP, MCP Vary Opinion On Budget Reduction

Gondwe; Revised budget downwards

The two main opposition political parties in the National Assembly are holding varied views regarding the announced proposal to reduce the 2015/16 budget by K23.7 billion for the second half of the fiscal year.

People’s Party (PP) says the reduction of the approved budget of K929.7 billion will create more problems than solving them as Malawi Congress Party (MCP) welcome the move but only skeptical over promises that the country should expect good economic environment soon.

Minister of Finance, Goodall Gondwe announced on Friday in the National Assembly that Government has decided to revise downwards the 2015/16 budget for the upcoming second half of the fiscal year with cuts in some areas and prioritization on resources for important matters including food.

Finance spokesperson for PP in the National Assembly, Ralph Jooma said in an interview that it is sad to hear that Government would like to revise downwards the budget instead of asking the House to revise the budget upwards since the original budget value has been reduced by half due to devaluating local currency.

“We don’t welcome the reduction as PP, we should have been expecting an increase to total budget because the Malawi Kwacha has already lost its value.” He said 

PP is worried that original K930 billion budget passed in July was framed when Malawi Kwacha was pegged at K400 to a dollar. Now that Kwacha has depreciated by 100 percent where it is now being changed to a dollar at close to K800, the same amount can only pay half of the planned activities.

“Therefore we should have expected the Budget to be improved upwards in Malawi Kwacha if we are to achieve the objectives of this budget but coming here and say that the budget is being reduced even in Malawi Kwacha is a mockery and it is a disappointment to Malawians. What we expect is that people’s expectations will not be met, this budget will not achieve its objectives and it is a total waste of financial year for Malawian” said Jooma

Chakwera

However, Leader of Opposition Parties in Parliament and President of Malawi Congress Party (MCP) Lazarus Chakwera gave thumbs up for the Minister decision to revise the budget downwards.

He said his party was happy to hear the Minister admitting in his statement that things are not well in this country and more money will be borrowed for hunger response.

The MCP President said some of the promises in the statement including on stabilizing economy were not new yet nothing is happening  “But you will recall that in the past they have given us this week this month’s; staff like that. They tell us that there is hope at the end of the tunnel, I hope it is not an oncoming trend”

“There is not much that is new really” Chakwera added

He continued; “The performance of this administration leaves a lot to be desired and so because of the past history it is kind of hard to tell that they are now telling us the truth. We will have to wait and see” 

Gondwe led into the chamber

Minister of Finance when delivering his statement on Friday did admit that the economy is still passing through turbulent times. 

“I regret that we have not yet established a stable macroeconomic environment in which low inflation and interest rates prevail, and where the variability of the exchange rate is narrow and predictable.” He said 

Gondwe informed the House that Inflation has stubbornly remained high since the shock devaluation of 2012, apart from a short period between May 2014 to April 2015 when inflation decelerated to 18.2 percent, thereafter it has kept on crawling up to 24.9 per cent in December 2015.

But he assumingly said last month’s decline of the rate of inflation to 23.5 percent is a welcome sign of light at the end of the tunnel. 

“In general however, the rate has remained high at an average of 23 percent during the period in question. In the circumstances, interest rates have also remained high, with the policy interest rate at the Reserve Bank of Malawi remaining for a long time at 25 percent, and lately increased further back to 27percent. In tandem, prime lending interest rates at commercial banks have also remained painfully high.” He noted

Gondwe then touched on the power of the local currency which is facing sharp decline against major trading currencies. He offered hope that the point of equilibrium for the exchange rate has been reached already since free floating exchange rate policy was adopted in May 2012 and “it is therefore expected that the rate should stabilise soon and those speculations that are perpetuating the depreciation should take note of this."

2015/16 Budget Revised Downwards By 23.7 Billion

Gondwe being led into the Chamber

To  embark  on  the  policy of  fiscal consolidation,  in  view  of  dwindling available  resources;  Government has decided to revise downwards the 2015/16    approved  budget by  K23.7 billion  from  an  approved figure  of K929.7  billion.

This means total budget for 2015/2016 will be K906.0  billion.

Minister of Finance and Economic Planning, Goodall Gondwe announced this in the National Assembly when presenting the budget review for the first half of 2015/2016 financial year.

He said in the next second half of the financial year, Government propose  to reduce  the  Recurrent  budget  by  just over  K17.1  billion and the Development Budget by sum of K5.6 billion.   

He said this  will  entail  that  for  the coming  months,  the  Treasury  will withhold  resources  that  are  intended for filling vacancies especially reducing the bloated” Civil Service.

He went on to say that in reducing Other Recurrent Transactions (ORT) the Cabinet  has  decided that  the  Treasury and  the  OPC  should  review  the various  perks including  travel,  vehicle and  fuel  entitlements  that  could  be scaled down.

He said the proposed reduction includes the development  budget through a suspension  of  a  few  projects  that  can be  removed  without  major impact  on economic  growth. 

He noted that there has  been  no significant  over  expenditures on budgetary performance vote by vote adding that the  performance  of  the budget  this  year  has  been better  than before  except  for  the  projected expenditure  on  FISP. 

On FISP he said the expenditure  relates to  the imports  of  fertilizers,  deep depreciation  of  the currency and the cost  of  procuring  fertilizers. He added that Government also shouldered other costs on the seeds for the programme since donors  declined  to  contribute  to the seed  subsidy whose  total  cost  is estimated  at  K9  billion.   

Among others on Budgetary performance, Finance and Economic Planning Minister Goodall Gondwe said total  revenue  and  grants  that  were targeted at  K386.1  billion  at  the  end of  the  first  half  of  the  2015/16 financial year  were  under-collected by K50.8  billion while Domestic  revenues that were  targeted  at  K312.4  billion fell  short  of  this  amount  by  K12.7 billion  down  to  K299.7  billion.  

He informed the House that although  a number  of  taxes performed  well,  the VAT  underperformed  considerably  by an amount  of  K5.6  billion. In  parallel, grants  performed  even  worse where the  target  of  K75.3  billion  was  under performed  by  K36.5 billion, less than half this targeted amount.

He therefore expressed need to strengthen  efforts at raising  domestic revenues  and  to  down  play  all  donor grants  in general  and  only  expect  to focus  more  on  development  loans from donors as a reliable mode of donor aid delivery.  

He however casted hope that Government is invigorating policies that aim  at  becoming  progressively,  more self-sufficient  in  budgetary matters than  has  been  the  case  so  far.