Minister of Finance and Economic Affairs, Simplex Chithyola Banda says the government will carefully implement expenditure control measures to avoid compromising social service delivery and prevent creation of arrears.
The minister was speaking in Parliament after the conclusion of the debate in the Mid-Year Budget Statement.
Some of the measures introduced after the 44 percent devaluation of the Malawi Kwacha include a a cut on foreign trips by the president and cabinet members and reduction in fuel allocations to government officers.
Addressing concerns about the recent 44 percent currency devaluation, the minister justified it as necessary for correcting macroeconomic imbalances which were only benefiting few individuals at the expense of the majority.
The Minister emphasized government’s commitment to building a resilient economy through short to medium term measures for macroeconomic stabilization, ensuring the availability of forex, food, fuel, and fertilizer.
He said beyond recovery, government is focusing on initiatives that would enable the country generate it’s own revenue and forex through agriculture (especially mega farms) , tourism and mining (ATM concept) diaspora cities, golden visa and labor export initiatives.
Chithyola Banda added that government is committed to restoring public debt sustainability, by among other things negotiating debt restructuring with creditors, thereby allowing fiscal space to invest in productive programs that will enable Malawi to pay it’s debt in few years to come.
He said going forward, the Malawi government will focus on ensuring that foreign financing is largely through grants, and borrowing to be in concessional terms and contracted for projects with a higher return rate.
The minister also announced that government has embarked on an automation and digitalisation project for all revenue collection processes, to enhance transparency and accountability in public resource mobilisation.
He assured the house that much as the economy is not performing as expected in terms of GDP growth as well as inflation due to economic shocks emanating from Cyclone Freddy, cholera pandemic and Russia-Ukraine war which had serious impact on various supply chains of strategic commodities, there is optimism for an economic rebound following the approval of the Extended Credit Facility by the IMF which has restored donor and investor confidence, bringing the much needed economic stability.
Meanwhile, the financial estimates presented in the Mid-year budget review statement will undergo scrutiny in a committee of the whole house before final approval.
