Economics Association of Malawi (ECAMA) says the duty-free week which will be introduced in the 2021/22 financial year will stifle local production as it promotes imports and will see government losing revenue.
ECAMA raised its concerns over the program during an interface with Minister of Finance Felix Mlusu in Blantyre.
The association’s president, Lauryn Nyasulu, said money which could have one into government coffers will be used for importing goods during the week which she also suggested will affect local goods.
“This comes at a time we would like to see local production being promoted if we have to achieve the growth levels being projected,” said Nyasulu.
According to Nyasulu, her organization wants the duty-free week to be aligned to production and promotion of some sectors that will contribute significantly to the development of the country.
Nyasulu added that there’s a need for a gradual exit strategy for the Affordable Inputs Programme (AIP), which has been allocated K142 billion in the budget, saying the programme is not sustainable.
In his response, Mlusu said the government has done several analyses on the revenue that will not be collected during the within the Duty-Free Week.
“We don’t believe it’s going to break the bank,” he said.
On AIP which this year is targeting over 3.5 million farming households, Mlusu said government is looking at alternatives to ensure people continue accessing cheap fertilizer.
“We are figuring out models that will enable us to exit the programme. But we cannot scrape off the programme without a replacement, so we will be experimenting with a workable model that will be good for our people and that Government doesn’t bloat its budget,” said Mlusu.