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2006/2007 Budget statement

Delivered in the National Assembly of Malawi
By Honourable Goodall E. Gondwe, MP Minister of Finance

Ministry of Finance, Malawi

16th June 2006

SARPN acknowledges Jason Agar, National Action Group Secretariat as the source of this document.
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  1. Mr. Speaker, Sir, and Honourable Members, I beg to move that the estimates of the recurrent Account and the Development Account of the 2006/2007 budget be referred to the Committee of the whole to consider them Vote by Vote and by Head and, thereafter, that they be adopted.

  1. Mr. Speaker, Sir, and Honourable Members, this House does not need reminding of the crisis from which we have just emerged. We were confronted by one of the worst disasters in this country’s history, when daily, many Malawians were subjected to living dangerously close to death and, many constantly wondered whether they would have food to eat tomorrow. It was one of those desperate moments Mr. Speaker, Sir, when people expect the maximum from their Government and examine its performance under a microscope.

  2. Honourable Members I am happy to testify that, in response to these legitimate expectations of the country, its leadership, led by His Excellency the President Dr. Bingu wa Mutharika and consisting of his Government, Honourable Members in this House, and donors here and abroad, collectively and single mindedly mobilized in search of food for the people. Honourable Members, while it is true that the result of these efforts did not restore normality of life to everybody, there is no doubt that with this collective effort of the Government Ministers and Members of Parliament in their constituencies, donors and NGOs included, we helped to turn hopelessness and despair into courage and determination to live for tomorrow.

  3. Mr. Speaker, Sir, let me take this opportunity therefore, on behalf of His Excellency the President, Honourable Members of Parliament, and indeed on behalf of the nation as a whole, to express the deep gratitude of Malawi to the donor community, particularly those in Lilongwe, for tirelessly working with us in our time of need. For some, this meant working day and night to think ahead and plan what to do. They liaised and mobilized their colleagues in government and organisations abroad to mitigate the crisis. For those of us that worked among them almost on a daily basis, the extent of the success of our efforts in Lilongwe was symbolized by the fact that more than 90 per cent of food assistance to Malawi was pledged long before the public declaration of the state of disaster. These pledges came without fun fare and publicity. It came unaccompanied by the humiliation of pictures of our desperate looking babies on the TV screens of the world. Unhappily this was not to be after the declaration we were obliged to make later.

  4. Among the local donor community, Mr. Speaker, Sir, let me single out DFID of the United Kingdom to whom we turned frequently even for impromptu support which readily came when justified; the EU Delegation that continued not only to deliver the current food requirement but also the replenishment of our Strategic Grain Reserve; the Embassy of Norway for mobilizing critical support and readily contributing to ideas on how to beat the crisis, and the World Bank whose usual momentous targeted financial support and involvement in our plans proved so vital. As usual the World Food Programme of the United Nations, took on the unenviable task of the distribution of food and the necessary logistics. They continue to deserve our particular thanks. The international leadership of the United Nations continued to be invaluable. They were with us at every stage of these activities. Top Executives of this organisation traveled to and from New York, Rome and Johannesburg constantly to focus on Malawi’s plight.

  5. Mr. Speaker, Sir, and Honourable Members, In times like these, not everything will have been perfect and there is bound to be scapegoating, but, all in all, it is comforting to know that those who deal with such crises year in and year out internationally, scored our work highly. More importantly, the deep gratitude of our people of what was done is the clearest vindication of the efforts that were mobilized. Mr. Speaker, Sir, at the center of all these activities was, of course His Excellency the President who guided the Government on what to do, and made strategic and timely appeals to the donor community in Lilongwe and abroad for the support that was so ably organized and became so effective.

  6. Honourable Members, calamities such as this have paralyzed the very social fabrics of some Nations, irreparably. In other countries however, disasters have provided a rallying point for the regeneration of a renewed determination to succeed. Here, in Malawi, the crisis is beckoning us to examine why these disastrous occurrences prevail repeatedly. Politically, we seem to have advanced impressively but, our economic performance retrogressed progressively. In particular our ability to feed ourselves, in a sustained way has vanished as has the pride of a hard working people that once disdained handouts. Mr. Speaker, Sir, this House which is the apex of the Malawi Nation, must, as a matter of priority, answer the question of: What is to be done to avert the famines which have become habitual. Mr. Speaker, Sir, in the view of many, there is no better occasion to confront this critical question than this budget sitting of Parliament. Let us put this duty before any other agenda.

  7. Mr. Speaker, Sir, to a large measure, in his gracious address to the House almost a fortnight ago, His Excellency the President was as good as declaring this to be the theme of this Sitting of Parliament. We must provide answers to this question if we are to declare to our people that never, never again shall we become so helpless and forced to beg for food. Never again Mr. Speaker, Sir, shall we be caught in the company of those whose children are paraded on World TV screens as examples of hungry nations. Our people are crying out to be led out of this humiliating ordeal.

  8. Mr. Speaker, Sir, allow me to end these introductory remarks by informing the House that having met the fiscal targets set during the past two years, we are poised to reach the completion point under the HIPC debt relief initiative during the 2006/2007 financial year. This will also lead to multilateral debt cancellation for Malawi that the country needs so badly. We therefore included the benefits which we expect from this initiative in the budget that I will be proposing to Parliament shortly. The House will wish to know, however, that attaining this status will depend upon the completion by the IMF Executive Board of the next review under the PRGF programme. The House will recall that last year, the discussion of the programme by that Board was only possible after Parliament deliberated and passed the budget. This is because the budget anchors the PRGF programme for the next year.

  9. Mr. Speaker, Sir, we have been informed that again this year, the IMF Board will not meet to discuss our case before Parliament passes the Budget. Honourable Members to this extent therefore, the cancellation of Malawi’s external debt becomes not only the responsibility of the Executive Board of the IMF but that of this Parliament as well. So far, we have been able to satisfy the staffs of the IMF and the World Bank regarding the conditions and measures which they call “triggers”, for reaching the HIPCs completion point. The three triggers that have not been met are likely to be waived by the IMF Board and will be justified by the staff at the Board Meeting of the World Bank. I am confident therefore that in the course of this year, we will be able to achieve this goal that will be so crucial to the future management and growth of this economy.

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