The Peter Mutharika administration has been commended for including pro-poor provisions in the 2019/20 budget and for allocating more resources towards education, health and agriculture.
On Monday, Minister of Finance and Economic Planning, Hon. Joseph Mwanamvekha presented a K1.731 trillion in which he allocated K172.8 billion to education, K167 billion to Agriculture and K101 billion to health.
In a statement on Wednesday, Oxfam Malawi Country Director Lingalireni Mihowa commended government for the allocations and for pro-poor provisions saying they demonstrate government’s commitment to reducing poverty and inequality.
The charity then advised ministries to put resources towards poor people who are the point of impact.
“Previous experiences have shown that letting a large chunk of resources sit or be spent in administrative processes at Capital Hill or in District Councils does not produce meaningful impact in bailing poor women and girls, men and boys out of poverty and inequality,” Mihowa said.
She also hailed the review of the minimum wage from MK962 to MK1,336.15 per day and the increase in pay as you earn tax-free bracket from MK35,000 to MK45,000 saying it will reduce the tax burden on the less privileged people.
She added: “The budget further prioritises and touches on areas that have a huge potential to stimulate economic growth in the country such as irrigation, value addition, markets for smallholder food producers, investments in energy sector and infrastructure development.
“The minister’s acknowledgement on the need to manage public debt which has increased alarmingly since debt cancellation in 2006 are some of the positive strides as well,” she said.
Mihowa, however, noted that there are elements in the budget that need serious reviewing so that the government expenditure blueprint truly serves the needs of a majority of poor Malawians and achieve inclusive, resilient and sustainable development.
Mihowa mentioned the introduction of one percent withholding tax on non-bank mobile money transactions saying it has the potential undermine the drive towards financial inclusion.
She also questioned the reduction of allocation in the farm input subsidy programme from MK41 billion to MK35 billion while maintaining the number of beneficiaries at 900 000 as well as the increase in user fees.
On the fees, Mihowa argued that poor people’s income will be affected and those who will fail to pay will be denied access to vital social services hence increasing inequality between the rich and the poor.
“Since the fees are yet to be gazetted, we urge government to reconsider this move. Oxfam will in the coming days engage relevant parliamentary clusters in lobbying that this be relooked into critically,” Mihowa said.