Tag Archives: Malawi Confederation of Chambers of Commerce and Industry

Malawi

Mixed reactions on Malawi mid-year budget review report: IMF gives it a nod as private sector laments high taxes

Maravi Post correspondent

BLANTYRE-(MaraviPost)—The mid-year budget review report which was presented on Friday in parliament by Minister of Finance, Economic Planning and Development, Goodall Gondwe, has attracted mixed reactions from different quarters, with International Monetary Fund (IMF) lauding the government for performing well in the first half of the financial year

Presenting the 2016/2017 Mid-Year Budget Review in Parliament on Friday, which has been revised downwards to K1.129 trillion from K1.149 trillion, Gondwe hailed Peter Mutharika administration for putting the country’s economy on a firm path to recovery with the effective fiscal and monetary policies.

He cited the decline in inflation to 10.2 percent as of January, a three percentage points reduction in policy rate to 24 percent and a 5.7 percent over performance in the domestic revenue as some of the indicators portraying the economy on the rebound.

Mixed reactions on Malawi mid-year budget review report: IMF gives it a nod as private sector laments high taxes

Commenting on the report, the IMF has said while the half-year fiscal performance is reassuring and has a clear focus, consolidation will need continued focus on bringing down inflation with fiscal discipline as an anchor.

In an interview with The Nation over the weekend, IMF country representative Jack Ree said the six months has seen a continuation of fiscal consolidation which is key to turning Malawi’s economic fortunes around unlike in the past five years.

“[the year] 2016 has been very difficult. The authorities needed to tackle an immense economic shock coming from the second consecutive year of drought.

“Confidence on Kwacha was low. Inflation expectations were locking at mid-20 percent range, which appeared unbreakable. However, government demonstrated an indestructible will to deal with the problem,” he said as quoted by The Nation newspaper in its 20th February edition.

Ree said policy focus remained persistently on discipline budget and keeping a lid on monetary excess, praising the authorities on structural reforms, particularly in public finance management.

“We are seeing results already,” he said.

However, Ree was coy to comment of the resumption of donor support.

“I would rather not speculate on the prospects of specific donor support programmes that is being discussed,” he said.

Malawi Economic Justice Network (Mejn) executive director Dalitso Kubalasa told the local paper that the government has a lot more to do.

“Government continues to struggle on bringing into fruition both the assumptions on the revenue side and the expenditure side of the budget. The 71 percent underperformance of the grants weighs heavily against the registered positive performance particularly in the tax revenues.

“The slowdown in expenditures also points to a worrisome development around government’s performance and obligation of providing quality public services to the masses, particularly the poor,” Kubalasa said as quoted by the local paper.

Commenting on the same, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira the performance of government hides a lot of expenditure burden that is passed on to the private sector and suffocating its performance.

Meanwhile, Malawi Congress Party (MCP) President Lazarus Chakwera, has bashed the Democratic Progressive Party (DPP) led government that the donors cannot trusted the leadership due to its usual casual way of handling corruption.

 

 

 

Malawi

MCCCI tips Malawi leader to head towards industrialization; blasts World bank, et al

Maravi Post correspondent
Mutharika sampling Malawi made blankets at the trade fair
Mutharika sampling Malawi made blankets at the trade fair

BLANTYRE-(MaraviPost)—Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has attributed the negative balance of payment facing third world countries including Malawi to unfair policies imposed by the International Monetary Fund (IMF), World Bank (WB) and World Trade Organization.

MCCCI president Karl Chokhotho, speaking during the official opening of the 28th Malawi International Trade Fair by President Peter Mutharika at Chichiri Trade Fair grounds in Blantyre, asked the president to boost the private sector by heading towards industrialization saying the international bodies’ policies led to massive deindustrialization in the country.

“The fair started as a component of the structural adjustment measures package, which malawi adopted in order to avert the economic challenges the country was facing then. During that period the prices of agricultural commodities on the world market plunged.

“As an exporter of such primary commodities Malawi experienced highly negative balance of payment during this time. In order to improve the net balance of payment position the government then decided to introduce the international trade fair, that’s creating platform for showcasing manufactured products that would attract foreign customers who in turn would bring in the much needed foreign exchange and improve the country’s  balance of payment position,” Chokhotho said.

He further said that the country today is faced with the similar situation of negative balance of payment citing the low prices tobacco is fetching on the international market.

“Today we are faced with the similar situation. Our primary agricultural products are fetching unprecedented low prices. We all hear the news about the low prices being offered in the exchange with our tobacco. The major difference between mid 80s and now is that the country has very few manufacturing industries remaining, whereas the country’s population has exploded. Our manufacturing sector has been principally dismated by the liberalization policy regime which the country adopted following what I am tempted to say improper advice of the IMF, WB and later on the WTO.

“The liberalization and privatization policies which these international bodies, that’s IMF, WB and WTO,  forced upon third world countries including Malawi as solutions to our problems devastated our economy leading to massive deindustrialization  and turning our country into a consuming economy. It is upon recognizing this fact and acknowledging that we need to resuscitate our manufacturing industry that we decided to give this fair the theme “achieving competitiveness through innovation”.

Chokhotho, while hailing the president on Buy Malawi Strategy, said the government should strive for industrialization to ensure the growth of revenues which the government collects from the private sector.

“Your excellence, even before the donors walked away from funding the government budget directorate, the main source of government revenue has always been taxes from private companies. These are in the form of income taxes and customs duty. Overtime custom duty is becoming less important because of the regional treaty the country is entering into.

“As such production by private sector needs to be boosted. The government must rely on the sustainable inflow of revenue from private sector. However, without growth in private sector, due to numerous obstacles in doing business, they will not be enough growth in government revenues.”

In his speech, President Mutharika said his government will continue working with the private sector, saying the business community success translates into national success and he asked the companies to be innovative and competitive so as to attract foreign customers.

“Your prosperity is our prosperity and my success should be your success. We are partners in business and partners in development and so let my vision be your vision. We are taking innovation to initiate private sector reforms. We need a beautiful minded public service that serves the public and the private sector efficiently,” he said while asking the private sector to think innovative and support government policies.

The Fair is an annual trade promotion event that gives exhibitors an opportunity to market their products and services and enhance product and brand visibility and generate leads that helps drive incremental sales.