Parliament approves K722 billion provisional budget

Members of the National Assembly after passing the budget

Government has been given the nod to use K722,401,910,780 billion from the Consolidated Fund to enable it deliver services for at least four months, from 1st July, to 31st October, 2020 until the Appropriation Act 2020 comes into force.

The development is consistent with Section 178 of the Constitution of the Republic of Malawi, and the amount will form part of the 2020/2021 financial year budget.

It follows the fresh presidential polls on 23rd June which ushered in a new regime of President Lazarus Chakwera making it impossible to formulate and bring to the house a full budget before the start of the new financial year on 1st July.

Presenting the budget, Minister of Finance Felix Mlusu announced that an allocation to cater for affordable fertiliser and seed has been made and all contractual obligations which are due within the four months under consideration have been provided for.

The new administration will implement the Affordable Inputs Programme (AIP), where smallholder farmers, estimated at 3.5 million, will access fertiliser at K4,495/50kg bag.

Each farmer will be able to purchase up to two bags of fertilizer and enough seed for maize and legumes according to their land holding size.

Straight to business: The new broom at the Ministry of Finance

Another major highlight is the change in the tax free band from K45, 000 to K100, 000.

The Malawi Enterprise Development Fund (MEDF) Youth loans provision has been increased from the current K15 billion to K40 billion with plans to gradually increase to K75 billion.

There is an expectation that the increased allocation will support the creation of 200,000 enterprises run by the youths and women and in turn create over 600,000 jobs resulting in increased tax base and improved people’s welfare.

The new government plans to review the minimum wage from the current rate of K35, 000 per month to a proposed K50, 000/month with engagement of the Malawi Congress of Trade Union (MCTU) and Employers Consultative Association of Malawi (ECAM).

Mlusu indicated that the Youth Internship Programme and the private sector will be incentivised to give them internship opportunities.

Dausi chats with the Mlusu the new Finance Minister

According to him, the arrangement intends to create job opportunities for the youths adding that the Expanded Internship Programme will be the beginning of the National Youth Service Programme that government intends to introduce.

Wages and Salaries are projected at K166.7 billion, representing 36.6 percent of the 2019/20 financial year’s approved Personal Emoluments figure of K456 billion.

Agriculture Development and Marketing Corporation (ADMARC), has been given resources to enable it purchase maize and other produce from farmers.

The entity will be allowed to borrow from the commercial banks to enable farmers have a reliable market to sell their produce.

Democratic Progressive Party (DPP) Spokesperson on Finance Joseph Mwanamvekha congratulated Mlusu whom he described as a professional and a very balanced person and was upbeat he will properly manage the country’s finances to spur economic growth.

Former DPP Ministers Kondwani Nankhumwa and Vuwa Kaunda 

He underscored on the need for government operations to continue without disruption noting that on-going projects which were signed must continue.

The former Finance Minister cautioned that civil servants need to be protected and not victimised for them to enjoy 'the promised Tonse Canaan dream' of decent and good jobs.

Sounding somewhat sarcastic, Mwanamvekha said he anxiously waits for the Tonse Promised land of milk and honey, with promises of no pain and fear.

“We can’t wait to buy fertilizer at K4,495 as the country is approaching the agriculture season, we can’t wait for the promised duty free month, can’t wait for the creation of one million decent jobs, we can’t wait to get non-renewable passports at K14, 000!” said the DPP legislator.

COVID-19 handshake Chimwendo Banda with Mlusu. Pictures by Lisa Kadango MANA

He applauded the Peter Mutharika’s regime for managing the economy well as evidenced by sustained economic stability for close to four years.

The former Minister reminded the current Chakwera leadership to ensure that chiefs are taken care of through provision of duty free vehicles every five year and a medical scheme to improve quality of their lives.

He went on further to intimate that whether or not the new administration delivers on its promises, it should be assured that the DPP will be back in 2025 where it belongs.

With a pledged to provide checks and balances, he wished the new Malawi leader success and good health