Parliament on Friday approved a K511, 269,522,794 billion provisional budget to run Government services from July 1 to October 31 this year, after newly appointed Finance, Economic Planning and Development Minister Joseph Mwanamvekha moved a motion seeking the much-needed nod.
Mwanamvekha said the short budget will form part of the full 2019/2020 financial year budget and was necessitated because Cabinet, which was appointed on June 20 by President Professor Arthur Peter Mutharika, had limited time to thrash out a full budget before July 1.
“As per tradition, this is not a budget statement but a motion,” Mwanamvekha, making his maiden official assignment, told Parliament.
The K511 billion will be spent on salaries, pensions, gratuties and some development projects.
He said assumptions in 2019 were that inflation will average 8 percent while the exchange rate will hover around K750 to a US dollar.
He said the government expects to reduce domestic borrowing from 4.1 percent of gross domestic product to 0.3 percent.
The FM said wages and salaries will be K139 billion, which is 34 percent rise of the 2018/2019 budget due to promotions of thousands of teachers and security officers.
His plea for the House to OK the budget went without any tussles from the opposition Malawi Congress Party, which attended the session but continues to boycott debate on the State of Nation Address (SONA) by the President which he delivered on June 21.
Sosten Gwengwe, lawmaker and financial spokesman of the MCP, said his party “felt compelled” to come to the House to pass the provisional budget.
He said the Government should check on “alarming levels” of local and external debt and Parliament should be regularly updated on economic trends.
“I expect from the new minister that this will be put under control,” Gwengwe said, warning against Government’s continued borrowing.
Agriculture powers the country’s economy, supported by donor inflows which come as support to the budget.
Mutharika, in his SONA titled 'Consolidating Our Gains for Rapid Transformation', underlined his government's drive to continue fixing the economy and developing the country.
"Our economic indicators are positive," he said, estimating that the economy will grow by 5 percent in 2019. "This growth will primarily be driven by high growth in the agricultural sector," he said.
The President said in the next five years, " my government will create enough fiscal space to sperahead the development agenda."
Other highlights of his statement were:
. Annual inflation to continue to decline and remain within single digit levels with an average of 8 percent.
. Malawi has enough food in the 2019/2020 financial year, with maize production incerasing from 2.6 million metric tonnes in 2017/18 to 3.3 million tonnes in 2018/19, an increase of 27 percent.
.Government will construct 250 secondary schools across the country. This means each of the 193 constituencies will have a new secondary school.
Mutharika said Malawi has "a lot of potential to achieve unprecedented transformation. We have set the foundations for that transformation.
"In the last five years, we have demonstrated that we can deliver progress out of very difficult circumstances."