Rédaction Africa Links 24 with Malawi Voice
Published on 2024-03-11 17:44:51
The United Democratic Front – UDF has recently raised concerns about the government’s financing strategies and the increasing reliance on borrowing to finance the National Budget. Ismail Rizzq Mkumba, the UDF Finance Spokesperson in Parliament, emphasized the need for the government to enhance non-tax revenue generating units and regulate and prioritize sectors like mining and tourism to increase revenue and reduce borrowing.
In response to the Budget Statement presented by Finance Minister Simplex Chithyola Banda on 23rd February 2024, Mkumba pointed out that the country’s projected total Public Debt is expected to exceed K13.1 trillion or 85% of the GDP. He expressed worry about the unsustainable level of Domestic Debt, which has increased from K5.8 trillion in March 2023 to K6.1 trillion in the planning fiscal year.
Mkumba highlighted that the government’s appetite for borrowing is insatiable, and he raised concerns about the projected interest payment of K1.5 trillion for the 2024/2025 Financial Year. He warned that this burden would be unbearable for many poor Malawians and could have adverse effects on the economy in the long run, especially for Small and Medium Enterprises.
The UDF Finance Spokesperson emphasized that the country’s current budget recovery is artificial, as it relies heavily on borrowing for consumption rather than investment. He expressed skepticism about the effectiveness of the activities outlined in the budget in terms of productivity, job creation, and import substitution. Additionally, Mkumba cautioned against focusing on construction projects with uncertain completion timelines, as they may not address the urgent needs of the economy.
Moving forward, Mkumba urged the government to reevaluate its financing strategies and prioritize revenue-generating sectors to reduce the reliance on borrowing. He called for clear plans to manage recurring budget deficits and emphasized the importance of addressing the unsustainable level of Domestic Debt to prevent further economic challenges for Malawians.
Overall, the UDF’s concerns highlight the need for the government to adopt sustainable financial practices and prioritize long-term economic stability to ensure the well-being of all Malawians, particularly those in vulnerable economic sectors. By addressing these issues, the government can work towards creating a more resilient and prosperous economy for the future.
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