©GONDWE PILL FOR SQUEEZED MALAWIANS

GONDWE PILL FOR SQUEEZED MALAWIANS Minister of Finance and Economic development Goodall Gondwe Minister Goodall Gondwe offset the bitter taste of a national budget overshadowed by a worsening economic turmoil by delivering a headline-seeking financial game plan the government is proposing to implement in the 2016/2017 financial year. Minister of Finance Goodall Gondwe: Budget plan is a caution operation Delivering his budget statement in Parliament on Friday, Gondwe noted that the country continues to face “significant resource constraints” due to continued deep reductions in donor support, He said : “Over and above that, it has been lamentable that our collection of tax and non-tax revenues has also declined ,” Gondwe said observed that there is ever-increasing demands for the delivery of critical public goods and services. Inside the 2016/2017 budget, there are number of major changes that Finance Minister has made in different Ministries and departments of government. Fisp cuts, irrigation gets more For over 11 years now government has been promoting agriculture in terms of Farm Income Subsidy Program -FISP Which enables rural farmers to buy fertilizer and seeds at a subsidized price as one way of ensuring that Malawians have enough food for their families. But according to 2016/2017 budget, government has reduced almost over half of last year’s allocation to the program which in 2015/2016 season was budgeted at K63.9 billion to K31.4 billion in 2016/2017 financial year. This means that number of beneficiaries in -FISP will go down again this year and farmers have to get ready to cough more from their pockets to buy farming materials like Fertilizer and seeds. In total the ministry have been given K198.5 billion with more allocations going towards Irrigation farming and purchasing of maize from other countries and local traders at Admarc in preparation for hunger which is expected to affect over three million Malawians. “The Government will continue to support winter cropping among these farmers, and will distribute subsidised fertilizers and treadle pumps. However, Honourable Members will agree with me that this support has been provided to smallholder farmers over a long time now, and it will be important to evaluate performance,” said Gondwe. He said the Ministry of Agriculture, Irrigation and Water Development will analyse the projects and determine how best they should be transformed in order to justify future allocation of public resources. Gondwe conceded that the implementation of FISP has generally been a fiscal challenge because of the associated exchange rate risk which has been wholly borne by the government, leading to significant cost overruns every year. “ An additional challenge has been the targeting mechanism. Various studies have revealed that only about 50 percent of the actual beneficiaries of the programme were eligible beneficiaries,” he said. He said government will use public institutions through tenders in ensuring that hard-to-reach parts of the country are served in the FISP reformed program. No new jobs, salary for civil servants up 15% Government has in the budget made it clear that due to a number of factors it is not planning to employ people in the 2016/2017 financial year except 10,500 primary school teachers, 477 secondary school teachers, and also that the recruitment priority are mainly given in security institutions particularly the Malawi Police Service and Malawi Defence Force with others in the ministry of Agriculture and Health especially extension service workers. Civil servants at least have something to smile about as they will receive a 15 percent salary adjustment especially those with lower grades of the civil service. Gondwe said as the President Peter Mutharika has repeatedly said, it is important for Malawians to recognize that budget support from bilateral donors is “unlikely to resume”. Therefore, he said, Malawi must learn to manage its affairs within the available resources. “This is not the time to expect large yearly salary increments from the Government.” Good news The budget statement announced the removal customs duty on power voltage regulations which was at 5%. Government has also announced the removal of 10% import duty on surgical gloves. K3 billion has been allocated towards University students with loads which is being run and registered by the Higher Education Students Loans and Grants Board doubling the allocation from last year’s K1.5 billion.