Malawi's Economic Projections Under Fire

 

Gladys Ganda, Chairperson of the Parliamentary Budget and Finance Committee, has strongly criticized the 3.2% economic projections outlined by Minister of Finance Simplex Chithyola Banda in his Budget Statement. Ganda likened the projections to a "whitewashed tomb" - outwardly appealing but inwardly flawed.



Speaking in Parliament on March 17, 2025, Ganda condemned the government's economic policies, which she believes have led to persistent borrowing, overspending, and inflationary pressure. Malawi's inflation rate currently stands at 32.3%, with a budget deficit forecasted at MK2.473 trillion and a national debt of MK16.19 trillion.


Ganda emphasized the need for a more strategic approach to resource allocation, focusing on initiatives that yield tangible results. She also expressed concern over the recent volatility in foreign financing, particularly the withdrawal of funding by donors like USAID.


However, Ganda welcomed some of the government's tax measures, such as the removal of tax on irrigation equipment and the elimination of excise tax on hybrid vehicles. These moves are expected to ease financial burdens on households and promote eco-friendly transport.


The Budget and Finance Committee has recommended several measures to revive the economy, including:


- Enhancing revenue mobilization*: Strengthening debt management and reducing borrowing

- Improving budget transparency and accuracy*: Ensuring that budget allocations are realistic and effective

- Strengthening agricultural resilience*: Addressing the high cost of inputs and enhancing budget flexibility and fiscal space


Overall, Ganda's criticism highlights the need for more effective economic policies and strategic resource allocation to address Malawi's economic challenges.

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