Budget unrealistic-DPP

DPP Spokesperson on Finance Joseph Mwanamvekha

Democratic Progressive Party (DPP) has described the recently presented budget as very unrealistic because poor people are not going to benefit from it as the tax measures in it are not favourable to those in rural areas but rather favouring the rich.

The party’s Spokesperson on Finance Joseph Mwanamvekha faulted the impression the average exchange rates to be at K780 but that it’s currently past that as the selling rate for the banks is close to K800 and will continue looking slipping due to forex shortage and the absence of budgetary support.

He noted that normally for the country to get donor support there is need for an International Monetary Fund (IMF) programme in place and in its absence; other development partners can’t bring in aid.

With these missing variables together with performance of the tobacco market, Mwanamvekha casted doubt on the attainment of the K780 average.

“As we’re coming closer to the lean period, starting from September to December, normally prices particularly of food which is the major determinant in the inflation it picks up; if the inflation is 9.4 percent what will happen in October? Because at that time the food basket will be more expensive than we speak today. So am saying that that budget is unrealistic

“Secondly, that budget most of the poor people will not benefit; actually the things are upside down because we’re subsidizing beer. I thought they were going to subsidize those issues that the poor Malawians will require for example cooking oil. Remember I’ve been saying here that the price of cooking oil will go up just because of VAT and of course with inflation and also because of the depreciation of the Malawi Kwacha we all know that. So the Malawians that are in the village or the farmers are not going to benefit from this particular budget” he stated.

DPP legislators Kondwani Nankhumwa and Bright Msaka conferring in the house

The former Finance Minister pointed out the assumptions made are not realistic thereby making the possibility of realizing the targets very unlikely.

Following the announcement that government is putting up a policy on the free water and electricity, Mwanamvekha said he is keen to see how it will be implemented as it has not stated when this will become operational.

“So I don’t think it’s time to celebrate yet because we don’t know when it’s going to be implemented because they are waiting for the policy for it to be adopted and approved so we don’t know.

“Secondly, on the duty free week, you have seen there is a limit $3,000 how much is it? And that will only be for SME’s or small traders that might be going to Tanzania, Zambia or South Africa, but those big businesspeople they’re not part of that, so it is very selective it’s not going to benefit companies those that will create jobs for Malawians”

The DPP legislator noted the public debt which moved from approximately K500 to K811 billion, is quite huge and will practically cloud out the private sector with government’s continued borrowing.