The National Planning Commission-NPC is appealing for an increased development budget in the national financial blueprint, to achieve the 2063 agenda.
In the current 2021/22 proposed National Budget, out of the total K1.99 trillion, K1.4 trillion is the recurrent expenditures.
The 2021/22 budget is the first financial blue print that sets the ball rolling for the implementation of the Malawi 2063 development plan.
NPC Director General Thomas Munthali indicates that although the development budget is slightly higher this year, it is still low.
“The allocation to the development budget remains low but the minister needs to be commended in that only last year the allocation was around 5% of GDP. In the 2021/22 fiscal year, when you add the K1trillion local development bond to the equation, the allocation comes to around 10% (basically doubling),” Munthali explains.
In the proposed budget, only K570 billion is the development budget.
“Development expenditure, Madam Speaker is programed at K570.8 billion, representing 5.6 % of the rebased GDP. This, however excludes the development expenditure that will be financed through the issuance of the long term development bond where some of the projects will be financed off budget,” announced Mlusu.
In recent years, there has been a seemingly growing interest in listing debt on the stock market in order to raise capital for various large scale development and investment projects.
One of the developments which was born out of such a financial instrument is the Area 18 Road Interchange by the Roads Fund Administration.
Cognizant of the additional K1 trillion development bond, Munthali still insists that there is still more to be done in balancing the development budgets to be reflective f the country’s development aspirations moving forward.
He stresses that full and effective implementation of the 2063 agenda will need a development budget that is not just 10 % of the GDP but at least 25 %.
“We should, however, eventually be moving this towards 25% if we are to accelerate our graduation into the middle-income economy status by 2030. Getting into the middle-income status category is very crucial as it will allow us to gain access to more international resources for financing our development programmes,” emphasizes the NPC Director.
Currently, Malawi is still one of the world’s Least Developed Countries-LDCs, but harbors ambitions of graduating to the middle income states in the next 9 years.
Meanwhile, the finance minister is hopeful that the in the 2021/2022 fiscal year, Government will be able to implement economic policies and programs that will put Malawi on the right path to realization of the Malawi 2063.