Minister presents 1.99 trillion kwacha 2021-2022 budget

Minister of Finance Felix Mlusu has presented the 2021- 2022 national budget which has dropped to 1.990 trillion kwacha from the 2020 to 2021 budget which was 2.2 trillion kwacha before being revised to 2.3 trillion kwacha

Presenting the budget in parliament this afternoon, Mlusu said 1. 27 trillion kwacha will be financed by grants and revenue.

Mlusu has also projected that the economy will grow by 3.8 percent in 2021 and 5.4 percent by 2022.

Among the highlights, Mlusu says tonse alliance government is drafting a policy for free electricity connection for public, rural and peri urban areas.

He added government will scrap off the 17.500 kwacha connection fee and implementation is expected to commence in the 2021- 2022 fiscal year.

The finance minister added that government has also put aside 12 billion kwacha for maize purchase to restock the National grain reserves.

“Inflation rate is projected at 5.7 percent due to reduced food prices as there is a stable supply. Government has put aside 1 trillion kwacha to be raised in 5 years for flagship projects among them the construction of inkosi Mbelwa University and the Lilangwe Chingale Namatunu roads among others,” Mlusu

On custom measures, government has introduced a duty free week for imports not exceeding 3000 dollars to boost businesses.

Mlusu said tax payers will benefit from the window once a year, adding dates will be gazetted within the year.

Government has also increased the Comesa simplified trade regime threshold from 2000 dollars to 3000 dollars meaning small scale traders can import goods and only pay duty on goods exceeding 3000 dollars.

In the 2021 2022 budget, government has removed duty on importation of raw materials for building materials for churches and  mosques as soon as the law has been amended, duty has also been removed on vessels to boost tourism, raw materials for medicaments and pharmaceuticals, as well as raw materials for printing and publishing books.

Government has also removed 10 percent import duty on soap noodles, for producers to make soap cheaply.

Pay as you earn threshold has also been reduced to 25 percent from last year’s 30 percent for those earning between 100, thousand kwacha to one million kwacha and has increased to 40 percent for incomes of more than 6 million kwacha per month.

The Reserve Bank of Malawi has bought gold worth 60 million kwacha through the structured gold market.

Meanwhile, National Panning Commission has hailed government for coming up with a budget that corresponds to the national blue print.

Speaking in an interview after the presentation of the budget statement by the minister of finance NPC Chief Executive Officer, Dr Thomas Munthali, has since asked all Malawians to work towards realization of government’s vision through implementation of vision 2063 agenda.

Commenting economic expert says government has missed an opportunity by not addressing the outcry of Malawians on Value Added Tax VAT on cooking oil in the 2021 to 2022 national budget

Speaking with Radio Islam associate professor Betchani Tchereni the lecturer at MUBAS University says the new budget should have addressed the issue saying cooking oil is a basic necessity hence must be affordable by all.

Associate professor Tchereni has however called upon members of parliament who have now gone into cluster committees to address the issue adding that failure to do so will affect people’s live hoods.

He says the 2021/2022 national budget has not given much details on how government will implement projects.

Associate professor Tchereni says “it is worrisome that government has planned to borrow over 700 billion kwacha within the country which will affect the private sector and consumption which grows the economy as banks will prefer to lend money to government than private investors.”

However, he has hailed government for prioritizing education in this year’s budget

Mlusu did not mention the construction of Mangochi Makanjira road though government stopped the demonstration by concerned citizens against government’s reluctance to construct it despite being stated in the campaign manifestos of political parties

Organisers of the demonstrators suspended the strike after president Chakwera assured them that his administration will construct it and mentioned the road in his state of national address