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Economists differ on fiscal calendar change

There are mixed reactions to the executive’s preference for an April 1 to March 31 fiscal calendar from the current July 1 to June 30 schedule.

The government announced the change yesterday through a statement signed by Secretary for Economic Planning and Development and Public Sector Reforms, Winford Masanjala.

According to the statement, the move is meant to ensure that agricultural issues are highly prioritised and adequately considered.

“Given Malawi’s economic structure this change will ease government’s ability to fund public institutions involved in the agriculture production cycle,” reads part of the statement.

Commenting on the development, former Finance Minister who is also opposition Democratic Progressive Party-DPP’s finance spokesperson in parliament, Joseph Mwanamvekha thrashes the government’s reasons saying there is always a mid-year budget review where prevailing issues are probed.

“I don’t think that will make any significant difference because even with the current fiscal year, it is possible to fund the budget,  to start buying maize between April and July, because the current fiscal year ends in June. So between March to June it is possible to still buy maize and that is why we have a midyear budget review.” Clarified the former Finance Minister.

However, an economics lecturer at the Polytechnic, Betchani Tchereni thinks otherwise.

“The argument provided by the ministry does hold a lot of water, that yes indeed our production year is actually up to March. After March then we have got raw materials which we now channel into the agri-based industries to make sure that people continue to be employed and that’s the time we also get resources from taxation.” Argued the Polytechnic economics guru.

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According to the government, the implementation of the changed fiscal calendar will occur in phases over a period of 2 years, where it is expected to start proper operation in the 2022/2023 budget.

The changes will however require review of some laws.

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