Finance and Economic Affairs Minister, Simplex Chithyola Banda, takes center stage today as he unveils the proposed 2024/25 National Budget, amid high hopes from Malawians seeking relief in the challenging economic climate.
This marks his inaugural comprehensive fiscal plan, following his presentation of a Mid-Year Budget Review Statement on November 17, 2023, succeeding his predecessor Sosten Gwengwe. In the lead-up to the budget announcement, stakeholders have provided their input during pre-budget consultations, expressing expectations for the financial plan to incorporate their feedback and align with President Lazarus Chakwera’s State of the Nation Address (Sona) delivered on February 9 this year.
The Sona garnered praise for its alignment with Malawi 2063, the country’s long-term development strategy aimed at fostering self-reliance, middle-income status, and inclusive wealth, with a focus on agriculture, tourism, and mining. Minister Chithyola Banda has engaged in extensive consultations throughout the budget formulation process, culminating in a final round with Parliament’s Budget and Finance Committee and civil society organizations just six days ago. In a recent interview, William Chadza, Executive Director of the Mwapata Institute, emphasized the anticipation for a significant reallocation of resources towards productive sectors like agriculture.
With the agriculture commercialization drive gaining momentum, Chadza anticipates a reduction of at least 25 percent from the Affordable Inputs Programme (AIP) budget to support medium-scale farmers transitioning to commercial farming.
Said Chadza: “From a financial allocation point of view, we hope that we will begin to see some actions in terms of reforms in the agriculture sector such as the reduction in AIP budget and re-allocation of resources to productive programmes within the same sector.
“This should include irrigation and climate resilient agricultural interventions. We can start with 25 percent this year and move to 50 percent so that we have a smooth exit strategy because we cannot just phase out AIP abruptly.”
The Economics Associations of Malawi (Ecama), in its submission during pre-budget consultations in Lilongwe on January 10, proposed a reduction by K50 billion in the AIP budget to be invested in megafarms.
The association also asked government to strengthen climate-smart agriculture investment in view of recurrent dry spells that threaten agricultural output.
Ecama further wants to see more incentives on mega-farm initiatives such as allowing those with mega farms to import a maximum of five tractors duty free.
