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The Employers' Consultative Association of Malawi (ECAM) says the 2021/22 budget is highlighting “the government’s commitment to achieving enablers of the long-term Malawi 2063 Agenda.”

Finance Minister Felix Mlusu: Presented K1.99 trillion National Budget Finance Minister Felix Mlusu: Presented K1.99 trillion National Budget

The employers’ body said this in a statement responding to the 2021/22 National budget which has been pegged at K1.99 trillion.

In the statement made available to MBC Online, the association said though the budget has been formulated amidst of slow recovery of the economy from the global health crisis brought by the coronavirus outbreak, but it “has overall been well anchored to deliver to the long-term plan of Malawi 2063 and the promises the Tonse Alliance made to Malawians during the campaign during the Fresh Presidential Elections in 2020.”

However, ECAM feels the budget is overambitious considering the continued economic challenges that the country is facing emanating from the Covid-19 pandemic.

“Reduced economic activities have contracted revenue generation for the country and therefore the expected domestic revenues may not be attained. In addition, microeconomic indicators which fuel good economic outcomes have been underestimated considering the current trends in their performances particularly inflation and exchange rate,” reads the statement in part.

And while recommending government for committing to pay back money owed to the industry in form of tax arrears for goods and services, ECAM has however urged government to ensure that borrowing is significantly reduced.

The association has also hailed government for the remuneration and Taxes reforms in the budget, saying “the increase in disposable incomes for Malawians will cushion the effects of the increased cost of living in the country so that many Malawians can attain a decent standard of living.”

On the taxes, the employers’ grouping also applauded the government in its effort to put in place measures that will assist to make some parts of the private sector competitive and cushion many from the effects of the Covid-19 pandemic.

On public sector reforms ECAM said “government should be commended for the plans to begin implementing recommendations made from the audit of public sector performance,” adding that a high-performing public sector “is the key enabler number 6 of the Malawi 2063.”

Ecam also scored government highly for the 16.5 percent and 9.4 percent allocations to the ministries of Education and Health respectively.

“A healthy, educated, and skilled population will help Malawi achieve industrialization as envisaged in Malawi 2063,” said ECAM.

And on job creation, ECAM has proposed that government should continue and expand investments in public works as one way of creating jobs and stimulating aggregate demand for goods and services.

On Affordable Inputs Program (AIP) ECAM said the network hiccups that characterized last season’s purchase should be rectified.

However, “In the long run, the government needs to review this program so that it targets only the neediest and that resources freed from the program could go to other important areas of the economy including value addition.”

And on the fight against corruption ECAM has welcomed the decision of increasing funds to be used in promoting the fight against the vice.

The association, however, said the “fight against corruption needs to be accompanied by measures that strengthen the public finance management system because fighting corruption alone without robust financial management systems would make the fight against corruption too difficult to be effective.”

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