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Malawi’s provisional budget at a glance: No universal fertilizer subsidy, tax free band raised to K100 000

No universal fertilizer subsidy in the budget

BLANTYRE-(MaraviPost)—The newly elected Malawi Congress Party (MCP) has started delivering its campaign promises by incorporating some of the aspirations in the provisional budget presented on Tuesday in the national assembly by the new finance minister, Felix Msulu.

True to their word, tax free band for civil servants has been raised from K45,000 to K100,000. However, the provisional budget has failed to meet some of the campaign promises made by the Malawi Congress Party together with UTM and seven other political parties prior the first ever fresh presidential election.  

For instance, both President Lazarus Chakwera and vice president Saulos Klaus Chilima promised universal fertilizer subsidy, a departure from Farm Input Subsidy Programme which was targeting very few smallholder farmers under the erstwhile ruling Democratic Progressive Party (DPP).

“After UTM is voted into power on May 21, fertilizer everywhere in Malawi will be sold at K4995,” Chilima said in 2019 as he was campaigning for presidency.

In 2020 he went into a coalition with MCP, and speaking to a multitude of MCP supporters at Lobi Trading Centre in Dedza district, Lazarus Chakwera said his party had tweaked its pledge in MCP manifesto in which the party promised to introduce a universal subsidy programme opting for cheaper fertilizer of 50 Kg bag per K4,495 as advocated by UTM leader Chilima.

But listening to the provisional budget today, one would say universal subsidy was just political gimmick to entice the electorates.

“Government will implement the Affordable Inputs Programme (AIP) whereby all smallholder farmers, estimated at 3.5 million, will access fertilizer at K4,495/50kg bag. Each smallholder farmer will be able to purchase two bags of fertilizer and enough seed for maize and legumes commensurate with their land holding size.

“In order to ensure that the programme is managed effectively, National Identity Cards, which will be linked to an electronic trackingsystem will be used when purchasing the fertilizer and other farm inputs. Government will also tighten border security to control cross border smuggling of the cheap farm inputs,” reads the budget statement in part, contrary to the Tonse alliance’s promise of universal fertilizer subsidy.

However, the new government can still walk one shoulder high for swiftly implementing some of their promises through the provisional budget which is for four months—that is from 1st July, 2020 to October, 2020.

As promised, the new government has raised the tax free band from K45,000 to K100,000; the Malawi Enterprise Development Fund (MEDF) Youth loans provision has been increased from the current K15.0 billion to K40.0 billion.

The Government has also promised to expand the Youth Internship Programme and the private sector will be incentivized to give internship opportunities to the youth.

According finance minister Msulu, the Expanded Internship Programme will be the beginning of the National Youth Service Programme that the Government of president Chakwera intends to introduce.

The budget has been pedged at Seven Hundred Twenty Two Billion, Four Hundred and One Million, Nine Hundred Ten Thousand, Seven Hundred and Eighty Kwacha (K722,401,910,780) which will be withdrawn from the Consolidated Fund to enable the Government to deliver services for a period of four months, from 1st July, 2020 to 31st October, 2020.

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