By Vincent Gunde
Minister of Finance and Economic Affairs Simplex Chithyola Banda on Monday presented his first 2023-2024 Mid-Year Budget Review statement pegged at K4.3 trillion from the initial budget plan of K3.9 trillion presented in February, 2023 by the former Minister of Finance Sosten Alfred Gwengwe.
The realignment of the Malawi Kwacha has seen total public debt stock increased from K10.60 trillion to K12.56 trillion meaning that the MCP led Tonse Alliance government in its three-year stay in Government has borrowed over K8 trillion.
Two DPPs led governments of the late Professor Bingu wa Mutharika and Professor Arthur Peter Mutharika and Peoples Party Government of Madam Dr. Joyce Banda left public debts at K3.16 trillion a development which is continuing chaining the country and bringing Malawians to total slavery.
Presenting the Budget Review in the National Assembly titled “Time for reflection to recover, develop and protect our economy” Chithyola Banda said Government is doing whatever is necessary to better the lives of Malawians regardless of the challenges the country has been facing in recent years.
Chithyola Banda said the policy shock to align the exchange rate was tough, painful but hugely important because the financial benefit from the misalignment accrued only to a few individuals at the expense of the majority Malawians.
He said the goal the MCP Government has is aimed at achieving within the next 12 month and it is possible if all Malawians join hands with the Government agenda to recover, develop and protect the economy.
The Finance- Minister said the recent 44 percent realignment of the Kwacha against the US Dollar is one such change in budget assumptions that warrants a review of the budget if Government is to deliver on its social and development mandate.
He said the measures to cushion Malawians from the currency adjustment will impact the implementation of the current budget observing that the country was already experiencing rising inflation due to supply chain disruptions brought about by the Russia-Ukraine war and the aftermath of Covid-19 weather-related shocks.
“The domestic economy is prone to natural disaster which affects productivity in various sectors,” said Chithyola Banda.
He said while Malawians appreciate that some of the borrowing was to implement Government development projects, the recent borrowing between 2017 and 2020 was contracted merely to support a stable exchange rate that was experienced in the sectors.
Chithyola Banda said this kind of borrowing led to the increase in public debts and has contributed to the high magnitude of the recent currency realignment.
Among the main take home messages Chithyola Banda presented in the National Assembly was enhanced provision for maize procurement to avert food insecurity, enhancement of foreign exchange earnings through diaspora cities, trade in service and mega farms and Government consideration of a moderate salary increase for civil servants by 10 percent with a promise that necessary steps are being taken to implement the increase.