The Minister of Finance, Economic Planning and Development Goodall Gondwe has admitted that the government faces challenges when implementing the national budget because the resources are not properly used.
Gondwe made the admission on Thursday, in Lilongwe, during the 2017/2018 pre-budget consultations.
“We need to look at how we do things. For instance, some hospitals use their resources quickly. It is important that we improve the way we manage the resources we have,” Gondwe said.
On hospitals, he was referring to the development early this year when most district health offices had reportedly spent over 80 percent of their annual budgets in the first six months, due to, among others, increasing prices of drugs.
He also appealed to people to change their mindset.
“We are more concerned with what government should do for us, not what we should do for our country. This is why most schools have broken desks, which can easily be repaired. Do we really need someone from Lilongwe to do that? We need to change,” Gondwe said.
During the same meeting, the Malawi Milk Producers Association National Director Herbert Chagona asked the government to remove 16.5 percent valued added tax (VAT) on milk which was introduced last year.
“The VAT has increased the price of milk. In the past few months, the price has gone up by 45 percent. The whole value chain has been affected. Liquid milk is not being bought. The 16.5 percent VAT must be removed,” he said.
But Director of Revenue Policy in the Ministry of Finance, Economic Planning and Development Crispin Kulemeka said the introduction of the VAT was in line with the government’s policies.
“VAT is deducted on all goods that are for consumption. We don’t deduct VAT on goods that are used for production. Fresh milk is a good candidate for VAT, but milk for infants is exempted,” Kulemeka said.
Malawi Economic Justice Network Executive Director Dalitso Kubalasa said considering that the 2018/2019 budget would focus on elections, the 2017/2018 financial framework should be framed in such a way that it can be used in laying a foundation for change in the country.
“We have been talking about the demographic dividend. Malawi is a very young population. Close to 70 percent of its people are below the age of 35. The budget should focus on turning this young population into a productive workforce,” Kubalasa said.
Lilongwe University of Agriculture and Natural Resources Acting Vice Chancellor Professor Emmanuel Kaunda said the next budget should focus on promoting such areas as industrial development, infrastructure development and peace and security.
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