The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has asked government to reduce fiscal deficit in tandem with the Malawi Growth and Development Strategy (MGDS) framework.
Speaking during the 2009/10 pre-budget consultative meeting in Lilongwe on Friday, MCCCI public-private dialogue coordinator Grace Amri noted that budget deficits have for a couple of financial years been widening, a development she said contravenes what is highlighted in the MDGS.
According to Amri, this year, the country’s fiscal deficit as a percentage of GDP will widen further to about -3.6 against a deficit of only -1.1 percent as underlined in the guiding blue-print.
However, Finance Minister Goodall Gondwe said it would be difficult for government to reduce the deficit as “it would entail serious disinvestment in most crucial sectors of the economy.”
The Minister further said this year; government would not be in a position to reduce the fiscal deficit below three percent due to, among other things, last year’s external shocks such as souring fertiliser and crude oil prices on the global market.
The Finance Minister said currently Malawi is using an International Monetary Fund (IMF) definition of budget deficit.
Gondwe challenged MCCCI that government has other lines of credit on which Malawi can tap and finance the deficit.
