Former finance minister Joseph Mwanamvekha who is also Democratic Progressive party Presidential aspirant has advised Chakwera led government to consider addressing public debt, energy and forex crisis and fiscal deficit in the next budget to be presented in parliament.
Mwanamvekha said this in an interview yesterday ahead of the 2023/24 Pre-Budget Consultation Meetings which start today in Blantyre.
Giving his input on how the next budget should be framed, he said that looking at the debt levels, if government continues this trajectory Malawi is at risk of becoming bankrupt.
Mwanamvekha said: “The minister of Finance should immediately stop borrowing and start seeking budgetary support, grants and restricting of the current debt.
“The minister of Finance should ensure that the macro-economic and administrative assumptions that he makes in the next budget should be realistic and achievable.
“So far, all the assumptions he has made in previous budgets such as inflation, interest rates and exchange rate to mention but a few, have been unrealistic and have never been achieved.
“If he continues to make such unrealistic and unachievable assumptions, the budget will lose credibility and Malawians will lose trust”
On foreign exchange shortage, he said treasury should put in place measures to build foreign exchange reserves and ensure the country has enough foreign exchange to assist in the importation of key items such as raw materials for manufacturers, medicines, fuel and fertilizer.
Mwanamvekha, who served as minister of Finance and Economic Planning and Development during the Peter Mutharika administration, said if this is not done, the country will never achieve macroeconomic stability and/or reasonable economic growth rates.
He said: As a country, we should be moving towards a situation where we are exporting more than we are importing. There are certain imports that need to be slowed down and encourage import substitution.”
To reduce budget deficits, Mwanamvekha said the next budget should put in place measure that will improve tax collection and tax compliance whilst simultaneously reducing government over expenditure
