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Facing our realities - Malawi budget speech 2002/03

1. Introduction
 
  1. Mr. Speaker, Sir, before I present the 2002/2003 Budget, allow me to make a few general remarks. On 9th January 2002, it pleased His Excellency the President, Dr. Bakili Muluzi, to appoint me Minister of Finance and Economic Planning. I, therefore, wish to express my heartfelt gratitude to His Excellency the President for this appointment. Mr. Speaker, Sir, I am encouraged by the trust that His Excellency the President has in me. As Minister of Finance and Economic Planning, my job is challenging, more so considering the difficult times our economy is going through. I am, however, comforted by the unflinching support and guidance given to me by His Excellency the President, Dr Bakili Muluzi, Cabinet Colleagues and the people of Malawi. The presence of His Excellency the President at this Budget presentation bears testimony to the support and guidance given to me. On my part, I will undertake to serve His Excellency the President, the Government and the people of Malawi to the best of my abilities in our fight against poverty and ensuring that Malawi is on a stable and sustainable economic growth path.


  2. Mr. Speaker, Sir, I wish to point out that our hard-won multi-party democracy will not be appreciated by the common Malawian if it does not translate into improved living standards. This, Mr. Speaker Sir, is a big challenge. In this country, the overarching goal is poverty reduction. Through the Budget, Government indicates its priorities and choices in order to achieve this goal. In this budget, the priority list has largely been developed by Malawians through the Malawi Poverty Reduction Strategy Paper (MPRSP) that His Excellency the President, Dr. Bakili Muluzi, launched on 24th April, this year.


  3. Mr. Speaker, Sir, Honourable Members, the Ministry of Finance and Economic Planning will coordinate the implementation of the Malawi Poverty Reduction Strategy (MPRS). In this respect, an MPRSP Implementation Unit will be created in the Ministry of Finance and Economic Planning to drive the implementation of the MPRS. In addition, an institutional framework for the monitoring of the implementation of the MPRS will be established and ensure that essential complementary reforms are made. Please allow me, therefore, to express my heartfelt gratitude to all Malawians who contributed to the MPRSP process.


  4. Mr. Speaker, Sir, the preparation of the 2002/2003 Budget has been participatory. It has benefited from contributions made by various stakeholders during the pre-budget consultations that were conducted in all the three regions of the country. I wish to thank my dear Cabinet colleagues, Members of Parliament, various stakeholders in the Private Sector, Civil Society, non-Governmental organisations (NGOs), and the academic community for sharing with me the vision for Malawi during the consultations.


  5. Mr. Speaker, Sir, Honourable Members, the theme for the Statement I am presenting today is FACING OUR REALITIES AND LIVING WITHIN OUR MEANS IN THE FIGHT AGAINST POVERTY.


  6. Mr. Speaker, Sir, as a background to this theme, allow me to reiterate that poverty in this country has reached levels that are unacceptable. The 1998 Integrated Household Survey (IHS), for example, has revealed that 65.3% of Malawians or approximately 6.3 million people are poor. Within this figure, about 28.7 percent are extremely poor. The 1998 Integrated Household Survey has also revealed that the level of income inequality in Malawi is high. The richest 20 percent of the population consume 46.3 percent while the poorest 20 percent consume only 6.3 percent of total goods and services. The key causes of poverty include limited access to land, low education, poor health status, limited off-farm employment and lack of access to credit.


  7. Mr. Speaker, Sir, it was, among other things, in recognition of this widespread poverty that the Government of Malawi embarked on developing the Malawi Poverty Reduction Strategy Paper (MPRSP) whose overall goal is to achieve “sustainable poverty reduction through empowerment of the poor”.


  8. Mr. Speaker, Sir, we cannot sit and expect things to change. Every-one of us has to take part in the fight against poverty whether rich or poor. Poverty reduction assumes a radical change of the mindset of the population in general, public servants, the faith communities, donors, non-Governmental organizations (NGOs), the Judiciary, and politicians from the grassroots to the highest levels. In the fight against poverty, petty jealousy and mere talk without action will lead to nothing. I, therefore, wish to appeal to Malawians to learn to emulate and harness those that make progress and support them. Government will have a deliberate policy to economically empower local investors as is done in several parts of the world.


  9. Mr. Speaker, Sir, Honourable Members, in our fight against poverty, we need, as a nation, to be singing the same song with the same tune. I wish to call upon each one of you to focus on issues that will take our people out of the poverty trap they find themselves in. This is the time that matters of the economy should take prominence in our discussions and not only political rhetoric.


  10. Mr. Speaker, Sir, as we interface with and try to economically empower our people, we should impart the philosophy that they have the right to live and the right to feed themselves. This is also in the wisdom of Saint Paul in his second letter to the Thessalonians in which he wrote:

    “For while we were with you, we gave you this charge, ‘If anyone does not want to work then he should not eat either.’ For we are hearing that some of you are living in idleness, not working but busy in other people’s affairs. Such persons we direct and charge in the Lord Jesus Christ that, by doing their work quietly, they earn their own living” (II Thessalonians 3:10-12)).
    This means that everyone, led by the highest political leader, should think, dream and talk of prosperity and do the best they can to achieve the country's goal of poverty reduction.


  11. Mr. Speaker, Sir, over the years domestic revenue collections have increased at a pace much lower than our demands on expenditures. The economy cannot generate enough resources to match our demands. In recent times, donor inflows have also become unpredictable. It is important, therefore, that as a nation we depend more and more on our domestically generated resources, as pointed out by His Excellency the President when he gave his State of the Nation Address during the official opening of this Budget sitting of Parliament. It is for this reason Mr. Speaker, Sir, that we need to boldly face our reality of meager resources and live within our means and hence the theme of this Budget Statement. Failure to do this will result in Malawi seeking recourse to borrowing and hence result in rising inflation and interest rates. Mr. Speaker, Sir, what Malawi needs is macroeconomic stability as a precondition for economic growth and poverty reduction.


  12. Mr. Speaker, Sir, Honourable Members, I will take the opportunity in this Budget Statement to give details of the broad outline of our achievements. I will start by explaining briefly to the House some major economic developments abroad and here at home that are likely to influence the budget framework for the 2002/2003 fiscal year. It is important that I do this as developments abroad do have an impact on our economy. It is also important that we compare our performance to that of the rest of the world.

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