K722 billion four-month budget approved in Parliament

Parliament has approved the K722 billion four-month provisional budget which Minister of Finance Felix Mlusu presented today.

The approval allows the Lazarus Chakwera administration to withdraw an amount not exceeding (K722,401,910,780) from the Consolidated Fund to enable the Government to deliver services for a period of four months, from 1st July, 2020 to 31st October, 2020 or until the Appropriation Act, 2020 comes into force, whichever is earlier.

Presenting the budget, Mlusu said the Provisional Budget has total revenue and grants amounting to K459.1 billion of which K407.3 billion is domestic revenues and K51.9 billion are grants.

On Wages and Salaries, Mlusu said they are projected at K166.7 billion, representing 36.6% of the 2019/2020 financial year’s approved Personal Emoluments figure of K456.0 billion.

“Government will engage Malawi Congress of Trade Union (MCTU) and Employers Consultative Association of Malawi (ECAM) to review the minimum wage from the current rate of K35,000 per month to a proposed K50,000/month,” he said.

He added that Government will implement the Affordable Inputs Programme (AIP) whereby all smallholder farmers, estimated at 3.5 million, will access fertilizer at K4,495/50kg bag.

He also explained that each smallholder farmer will be able to purchase two bags of fertilizer and enough seed for maize and legumes commensurate with their land holding size.

On tax, Mlusu said the tax free band has been increased from K45,000 to K100,000.

On other hand,     the Malawi Enterprise Development Fund (MEDF) Youth loans provision has been increased from the current K15 billion to K40 billion.

“This amount, Madam Speaker, will gradually be increased to reach K75.0 billion. With the increased allocation, Madam Speaker, Government is expected to support creation of 200,000 enterprises run by the youths and women. These enterprises in turn are expected to create over 600,000 jobs which will result in increased tax base, creation of more jobs and improved welfare of our people, especially the youths and women,” he said.

The minister added that Government will also expand the Youth Internship Programme and the private sector will be incentivized to give internship opportunities to the youth.