KEEPING OUR HEADS ABOVE THE WATER
SPEECH DELIVERED
by
HIS EXCELLENCY
DR. BINGU WA MUTHARIKA
PRESIDENT OF THE
at
THE OPENING OF THE BUDGET MEETING
OF THE NATIONAL ASSEMBLY
Ø
Mr.
Speaker, Sir,
Ø
Your
Honour the Vice President of the
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Honourable
Deputy Speakers;
Ø
Honourable
Leader of the House;
Ø
Honourable
Chief Whip;
Ø
Honourable
Leader of the Opposition;
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Honourable
Members of Parliament;
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Your
Lordship the Chief Justice, Hon. Unyolo;
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Members
of the Diplomatic Corps;
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The
Mayor of the City of
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Leaders
of all Political Parties represented in Parliament;
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Distinguished
Invited Guests;
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Ladies
and Gentlemen.
Mr.
Speaker, Sir, Members of Parliament
I
am greatly honoured today to appear before this august
House to perform the very important duty of opening the
Budget Session of the National Assembly for the 2004/2005
financial year.
I have titled my budget address this morning: “KEEPING OUR
HEADS ABOVE THE WATER”. This title is relevant because, Mr. Speaker, Sir, this
year’s budget takes account of the financial difficulties we are experiencing
and of the imperative of achieving rapid growth resumption through prioritizing
and more efficient allocation of resources on a sector-by-sector basis. The
major issues included in this year’s budget are: good governance, economic
planning, stabilization of macroeconomic conditions, the fertilizer subsidy,
public sector investment programme, institutional capacity building, the cotton
development project, irrigation, tourism, public health and HIV/Aids, energy,
and transport, only to name a few.
Mr. Speaker, Sir, first and foremost, I wish to underscore
the significance of this session to the economic transformation of this
country. As you all know, the national budget serves as a very important tool
for managing public expenditure, for conscious allocation of resources and for
stimulating economic activity. It is therefore my desire to see that our budget
is structured in such a way that it serves as an instrument for kick- starting
the process towards sustainable economic growth.
I strongly believe, Mr. Speaker, Sir, that the national
budget should not be seen as a routine source of funding for the mere
sustenance of government ministries and departments. Instead, it should be used
as a vital instrument for effectively delivering to the public what the
Government promised during the campaigns and other events.
It is also my desire, Mr. Speaker, Sir, to see that the
national budget serves the needs of our country as efficiently as possible. It
is in this regard that our budget has been structured in such a way that it
reflects the economic development realities, challenges and aspirations of our
country, and that it is the means to moving towards prosperity.
RECENT ECONOMIC PERFORMANCE
Mr. Speaker, Sir, before going into the budget proposals,
allow me at this juncture to highlight the recent performance of our economy so
as to give you an idea of where we have been,
where we are now, and where we are going. Let me start by saying that economic
performance improved marginally in the year 2003, as compared with the previous
year, although the economic growth rate was lower than the desired 6 per cent
per annum. As the House may be aware, real Gross Domestic Product (GDP) grew by
4.4 per cent in 2003 from a level of minus 1.8 per tent, in 2002. This
improvement was attributed to the good performance of most of the sectors of
our economy, particularly smallholder agriculture, due, to favourable rainfall.
As a result, the average annual inflation rate stood at 9.6 per cent in 2003 as
prices stabilised owing to a relatively good food crop harvest and heightened
food security.
Mr. Speaker, Sir, projections for the year 2004 indicate that there is a
slow-down in the real GDP ‘growth rate to 3.7 per cent, as compared to the rate
of 4.4 per cent achieved in 2003. This trend is attributed to the
under-performance of the small-scale agriculture subsector mainly on account of
poor rainfall and increased farm input prices. This slow-down has already
pushed up the inflation to about 12 per cent, which is above the target 7.5 per
cent set for this year. This trend reflects the influence of weather and
agricultural production upon our economy and underscores the need for us to
address our food security programmes more effectively. For this reason, our
government will introduce a fertilizer subsidy during the 2004/05 cropping
season and this will be announced soon.
ECONOMIC DEVELOPMENT STRATEGY
Mr. Speaker, Sir,
in the light of the recent economic performance of our economy, the option for
our government is to sustain the momentum. As I have said many times before,
this country is not poor. It has significant resources that can be harnessed
into production. We all need to move from the culture of begging and dependency
to a culture of hard work and self-reliance. All Malawians need to engage in
productive activities so as to strengthen the economic base of this country. We
all have the collective responsibility to find ways of engaging ourselves in
productive activities that can make us self-reliant.
This, Mr. Speaker, Sir, is the only way through which poverty can be
sustainably reduced. The need to become self-reliant requires us all to abandon
the currently prevalent culture of expecting the government and other official
agencies to provide all our necessities of life. In fact, the quotation from a
former President of the
Poverty, Mr. Speaker, Sir, is a state of mind. We can
decide to sit and beg the industrialized countries to feed and clothe us. Or we
can decide to stand up, work hard, and emerge from the poverty trap.
To address this challenge, Mr. Speaker, Sir, there is need to develop a new set
of priorities based on our own experience from the recent past so that this
country can develop fast and move out of poverty. It
is clear to me, Mr. Speaker, Sir, that there is need for us to have sound
economic development policies, programmes and projects if our economy is to
grow sustainably, thereby reduce poverty. For a long time, significant
development assistance and domestic resources have been invested in programmes
and projects which have had little or no impact in terms of stimulating the
economic growth and accelerate the reduction of poverty. Since our financial
resources are limited, and the needs of our people are enormous, it is clear
that we cannot do everything that is desirable all at once.
This is why, Mr. Speaker, Sir, we need to have a sound economic and development
planning framework that will prioritise our investments so as to maximise their
impacts on economic growth and development. We can only do this by
restructuring our budget so that it is not merely addressing our
immediate consumption
needs, but that it also becomes a tool for investment and wealth-creation that
stimulate economic growth.
GOOD ECONOMIC
GOVERNANCE
Mr. Speaker, Sir,
economic development and social transformation do not come about by accident.
It is the result of a nation and its leaders taking sound economic management
decisions. Therefore, during the next five years, my government’s strategic
objective is to establish a sound foundation for sustainable economic growth
and development. In this regard, my government has found it necessary to put
into place the Malawi Economic Growth Strategy and the Public Sector Investment
Programme (PSIP) as key economic development planning tools.
The Malawi Economic Growth Strategy is a very important policy instrument that
clearly articulates the steps that we need to take as a nation in order for our
economy to grow sustainably. It includes fiscal policy measures and monetary
policy measures that we need to implement so as to promote private sector
investment. We have also focussed on infrastructural development, and
improvements in the
performance of public
sector institutions in support of economic growth in this country, These will
soon be published in a booklet so that all segments of our society can
appreciate and support the Strategy.
The Public Sector Investment Programme, Mr. Speaker, Sir, is another very
Important instrument for good governance. This enables Government to select and
implement the most promising public investment programmes and projects within
the context of the Malawi Economic Growth Strategy. This recognizes the fact
that there is no way the standard of living of our people can improve if there
is no economic growth. We need to increase the income and employment
opportunities of Malawians, in both rural and urban areas, as a means of
improving the living standards of our people.
Mr. Speaker, Sir, we all need to be concerned about the economic challenges
that our country has been facing over the past few years. We should all take
economic policy matters seriously as the economy constitutes the lifeline of
any country in the world. Our economic performance is regularly being reviewed
by the IMF and the World Bank so as to ensure that our economy is managed in
accordance with internationally recognised economic management practices. Over
the past few years, our performance in this regard has been judged as poor and very much in need of
improvement. We also need to increase the competitiveness of Malawian goods and
services in foreign markets so that we can increase our foreign reserves and
thereby stabilize the exchange rate.
FIGHTING CORRUPTION
Mr. Speaker, Sir,
an important aspect of our growth strategy is economic governance. Let me start
by saying that “a
man of words and not of deeds is like a garden full of weeds”. This saying is relevant because as
I have said many times before, corruption is a cancer that is affecting
prospects for economic growth in our country. It is appalling that some
Malawians engage in corrupt practices as a way of promoting their personal
selfish economic and financial gains at the expense of national goals and
aspirations.
Unfortunately, corrupt practices are predominantly evident
among people in positions of trust. Corruption hinders economic growth because
it increases the cost of economic transactions including investment processes.
This is why my government is determined to fight corruption in all its forms,
especially in public institutions, 1 have decided that actions speak louder
than words. From now, it will be action, action and more action.
We all must ask ourselves what we can do to contribute to
the development of. this country instead of believing, as some people do, that
the privilege of those in authority is to have access to public resources
purely for personal benefit. Sadly, this is a prevalent perception especially
among public officials in government ministries, departments, statutory
corporations and also in political circles. This behaviour should be stopped at once as part of our drive to maintain
fiscal discipline. Those who are accustomed to stealing and to misuse of funds
and public office should quickly read the writing on the wall. They should
reform and learn to put the country first, instead of puffing their personal
gains in front of the country’s interests.
Mr. Speaker, Sir, good governance goes hand in hand with
the fight against corruption. This demands that our national budget should
reflect national interests and not individualistic personal benefits.
Unfortunately, there are many Malawians in leadership positions who believe
that they should derive their maximum personal benefits from public resources
even when they know that our economy is facing serious problems.
I wish, once again, Mr. Speaker, Sir, to warn these public
figures that my government will continue to track and punish them. I have
declared war
against selfishness and corrupt practices in public institutions as an important way of ensuring
that public resources are used for their intended purposes.
This, Mr. Speaker, Sir, is the essence of my zero-tolerance stance on
corruption. It is also in this regard that my government will strengthen the
capacities and performance of the Attorney General, Anti-Corruption Bureau, the
Directorates of Public Prosecutions and Public Procurement so that they
together can effectively curb corruption. The 2004/05 Budget will prioritise
the work of these institutions so that my Government achieves its objective of
rooting out corruption in this country. Those that profited from corruption
will no doubt hate this more, but those who are clean will welcome it.
Mr. Speaker, Sir,
let me now turn to how
recovery of the global economy will strengthen and broaden significantly in
2004 compared to last year. The global GDP is estimated to have grown by 3.9
per cent in 2003. A further improvement is expected in 2004 when the GDP growth
is projected at 4.6 per cent, This is a response to a sharp rise in global
trade, buoyant financial markets and the rebounding of the
global GDP growth rate for 2005 is estimated at 4.4 per
cent. However, terrorist strikes and threats and oil price volatility are the
major causes of concern.
The relevant question for us, Mr. Speaker, Sir, is how does
As the Honourable House knows, oil prices on the international market have
recently risen sharply with prices increasing from $26.50 per barrel in
September 2003 to $45.00 per barrel in July
2004. This has largely been due to rapid global economic growth combined with
the depreciation of the US dollar, the building up of oil inventories in
Europe,
Mr. Speaker, Sir, I am pleased to inform the House that, in
Malawi, fuel prices have been stable for the past four months
largely due to interventions through the price stabilization fund and the loss
recovery provision in the petroleum pricing structure. These two instruments
have temporarily stabilized the domestic prices. Nevertheless, the continuing
price increases are likely to strain the efficacy of these instruments.
My Government will continue to identify measures that will
assist in minimising the impact of oil price increases on our economy. These
will include a review of the existing levies in the price structure, sourcing
petroleum products from more competitive sources, and strict enforcement of
regulation to curtail malpractices in the domestic oil industry.
However, if the global oil prices continue to rise, it will
be difficult for us to keep fuel prices at current levels. All we can do to
minimise these inflationary pressures is to continue to control
public expenditure seriously and this is a major policy stance that my
government shall always maintain. I therefore urge all Cabinet Ministers,
Members of Parliament, Senior Civil Servants and other public officials to
exercise fiscal discipline in support of Government’s efforts for us to keep
our heads above the water.
STABILITY OF MACROECONOMIC CONDITIONS
Mr. Speaker, Sir, a related tool for good governance is the
achievement of stability of macroeconomic conditions. This is a prerequisite
for economic growth of our country. In terms of business financing we can attract
private sector investment into our economy only if the macroeconomic
environment is stable. This means that interest and inflation rates should be
low and that our foreign exchange rate should also be stable.
To have this environment, Mr. Speaker, Sir, our medium-term
macroeconomic outlook will be influenced by the efficient implementation of the
policies and other measures outlined in the Malawi Economic Growth Strategy and
reflected in the macroeconomic policy framework that the Government has been
discussing with the International Monetary Fund (IMF).
In this regard, the most difficult challenge for our
Government is to ensure strict public expenditure control and to improve
efficiency in the allocation and utilization of scarce public resources. We
also need to ensure food security, private sector growth, and public sector
investment to support macroeconomic growth and transformation.
I believe, Mr. Speaker, Sir, that these are important
policy areas that we need to be collectively addressed as the prerequisites for
the restoration of an economic programme with the IMF and donors. Such
restoration will lead to the resumption of the disbursement of donor budgetary
and balance of payments support which, in turn, will decrease Government
borrowing and the very high domestic debt stock.
RURAL CREDIT EXTENSION SCHEME
Mr. Speaker, Sir,
the House will recall that on various occasions, I have described at length my
vision of how we can improve the incomes of the rural segment of our
population. This is one of the cornerstones of my government’s economic policy.
In particular, I am concerned with the lack of employment opportunities for our
youth. My view is that, by improving employment opportunities in the rural
areas we would empower our rural population, including the youth, to enhance
their productivity and incomes.
Mr. Speaker, Sir, I wish to confirm that my Government has
now formally decided to establish this credit facility.’ However, Mr. Speaker,
Sir, having been in government now for some three months, and having studied
the needs of the rural community more closely, I have decided to increase the amount
of the
Facility to the sum of K800 million, instead of the K500 million that I had
mentioned during and after the campaign period.
The Minister of Finance will no doubt give the details of
how this scheme will work. It is my understanding, however, that the scheme
will be administered through existing micro-finance institutions that have
branches and agencies around the country. I expect that, since the money is now
available, we can launch the scheme quite quickly and before the end of the
year.
THE FERTILIZER SUBSIDY
Mr. Speaker, Sir, the agriculture sector continues to play
a key role in achieving growth. We expect the contribution of agriculture to
GDP to increase substantially owing to the planned implementation of a more
expanded targeted inputs, programme (TIP). Similarly, the government will
promote the export of products that are capable of value adding so as to earn
more foreign exchange on regular basis. The government will also support the
implementation of the Malawi Economic Growth Strategy by expanding access to
agricultural credit services and improving the marketing infrastructure. It is
in view of the import-once of this sector in our economy that government has
decided to subsidize fertilizer under the expanded Targeted Input Programme.
The budget has made provisions for this but we shall also need donor support
for this very important scheme which will improve food security in this
country. The scheme will be started soon in preparation for the forthcoming
2004/05 cropping season.
Under this subsidy initiative, 50,000 metric tons of
fertilizer will be accessible to targeted smallholder farmers through a voucher
scheme. The vouchers will be provided to some 2 million farm families
comprising:
·
First,
those who are below the poverty line and who do not have the means of
purchasing fertilizer; and
·
Second,
those who have a little more money for purchasing fertilizer.
To the poorest of the poor, 25 kg of fertilizer will be
provided free of charge in exchange for a voucher. This amount of fertilizer is
three times the amount of fertilizer that was made available under the previous
scheme.
The group with some money to spend can combine the vouchers
with money to buy more fertilizer than the 25 kg. This means that for a given
amount of fertilizer the cost to a smallholder farmer under the scheme will be
much less than was the case last year. For example, assuming that an individual
wishes to buy 50 kg of fertilizers, the cost will be half of the cost of last
year.
Preparations for the initiation of the scheme are well underway. Contracts
will0 shortly be placed for both the fertilizer and the maize seed and legumes
that will also be available. Registration of farmers for the vouchers is
already underway in all districts. In October, the scheme will be launched with
agricultural suppliers bringing the inputs to centres convenient for the villagers.
All inputs will be in the hands of the farmer in adequate time to ensure early
planting.
Unlike previous agricultural inputs programmes where the
donor community supplied the vast bulk of the funding, the fertilizer subsidy
for this programme will be paid for by the Malawi Government, underlining my
Government’s dedication to bringing down the cost of agricultural inputs for
smallholder farmers.
However, let me take this opportunity to thank the
Government of the
symbolic significance.
The British have said, and I quote, “It is a signal of the international
community’s respect for the direction of Government policy and its commitment
to growth and poverty reduction and to honesty and effective government”.
This programme is only the first step in a drive towards
reducing the cost of agricultural inputs. The present programme should be
viewed as a pilot project and I have instructed the Ministry of Agriculture to
explore other avenues in order to bring down the price of agricultural inputs.
In the years ahead, my Government will work with the private sector and other
interested stakeholders to develop further programmes that will benefit the
smallholder farmer, and ultimately lead to the overall goal of food security
for
THE PUBLIC SECTOR
INVESTMENT PROGRAMME
Mr. Speaker, Sir,
as a way of developing the private sector, the Government has initiated the
Public Sector Investment Programme as a major tool for implementing the Malawi
Economic Growth Strategy. All investment projects are being screened so as to
ascertain their contribution towards achieving the goals of the Malawi Economic
Growth Strategy. This means that those programmes and projects, which are currently being implemented but are
not compatible with the Public Sector Investment Programme, and are of low
priority, will either be phased out or re-designed. Therefore, hard choices and
decisions have to be made on which development projects should be implemented
in order to realize the national economic growth and development objectives and
priorities.
Mr. Speaker, Sir, the Government will, in this regard, encourage our
development partners to select and fund priority projects only from the Public
Sector Investment Programme. In turn, the Public Sector Investment Programme
will form the basis of our development budget. As such, the recurrent
expenditure budget of each government ministry or department will be
prioritized in relation to its stake in the implementation of, or support for,
economic growth and development priorities.
Gone are the days, Mr. Speaker, Sir, when government ministries and departments
were receiving funding without justification in terms of their contribution to
the strategic development of this country. It is my sincere hope that the donor
community will support this process and continue to assist us to address our
economic growth and poverty reduction programmes. To that end, I shall without
doubt, need the support of the opposition, local communities, industry,
Non-Governmental Organizations and the private sector in order for us to
achieve this vision. We are all in the same boat. So, let us all learn to work
together for the common good of the people of
CHANGING THE
QUALITY OF LIFE
Mr. Speaker, Sir,
in line with the decision to implement programmes and projects that have the
potential to change the quality of life in our country, the Government has
identified the following new priority projects during this financial year:
(1) The Cotton Development Project
Mr. Speaker, Sir, as I have said many times before, the cotton
industry has a lot of linkages, with great potential to contribute to economic
growth and poverty reduction. We do have ready markets for cotton-based
products. For example, you are aware that we do not even meet our export quota
under the Africa Growth Opportunity Act (AGOA) that is promoted by the
Government of the
We cannot, Mr.
Speaker, Sir, continue to miss this export opportunity, especially now, when
the tobacco industry, our main foreign exchange earner, is going through hard
times due to the anti-smoking campaigns in Western Countries and the lowering
of tobacco prices. The processing of cotton into various products that we can
export will also generate massive employment opportunities in this country. We
should take advantage of the historical fact that Malawians already have the
knowledge and skills to grow cotton and they can push it through value-adding
manufacturing processes.
It is in this vein, Mr. Speaker, Sir, that my Government will allocate some
resources in the 2004/05 National Budget to support a number of activities that
include, institutional development, production, marketing and processing of cotton.
The government will also work with the Cotton Development Association, the
National Smallholder Farmers Association of Malawi (NASFAM) and other
organizations to identify the specific activities that will be implemented
during the financial year.
(2) The Cassava
Development Project
Mr. Speaker, Sir,
another crop that we have not fully exploited is cassava. Just like cotton,
cassava is a multipurpose crop. Its products are used in the wood industry, the
baking industry, the starch industry, the battery making industry, the textile
industry and the beverage industry, just to mention a few. We can truly
describe cassava as a “tree of life”. The House may wish to note that the
cassava industry would also complement activities in the cotton industry.
Therefore, the production of cassava and various cassava-based products will
certainly increase income and employment opportunities for Malawians.
The government will, during this financial year, intensify the promotion of
cassava production and processing. Cassava production will be allocated some
funds in the 2004/05 Development Budget for the development and marketing of
cassava.
(3) The Kapichira
Irrigation Project
Mr. Speaker, Sir,
as the Honourable House knows, the
(4) The Tourism
Sector
Mr. Speaker, Sir,
another sector that has received priority in this year’s budget Is tourism. The
Malawi Economic Growth Strategy has identified tourism as an important sector
of our economy. As the House is aware, tourism is a very competitive sector in
Specifically, I Would like to cite a few activities which Government plans to
implement in the 2004/05 financial year:
(i)
the
construction of Ecotourist-Lodges;
(ii)
the
upgrading of roads leading to the Nkopola, Makokola, Sun and Sand and Kuchawe
hotels;
(iii)
promotion
of mountain tourism facilities;
(iv)
the
upgrading of international landing facilities; and
(v)
the
construction of cultural villages.
We believe, Mr. Speaker, Sir, that these utilities will
contribute to the growth in this sector and more activities will be implemented
in subsequent years.
(5) The Energy
Sector
Mr. Speaker, Sir,
energy is a very
vital factor of production. Without adequate and reliable energy sources, our
country cannot industrialize. However, as the Honourable Members of the House
know,
To that end funds have been allocated for weed harvesting
on the
(6) The Transport
Sector
Mr. Speaker, Sir,
transport constitutes a very large proportion of the total costs of doing
business in
Within this sector, there is also a very important project that we are
currently implementing. The Nacala rail link provides a direct transport connection
from the East African coast to
Mr. Speaker, Sir, as the House knows, in January 2003, the
bridge across the
Mr. Speaker, Sir, I am pleased to inform this august House that we are making
some progress in the construction of a new rail bridge at the Rivirivi site. We
have received some technical and financial support from the British Government
through its Department for International Development (DAD), for the
construction of the bridge. The Malawi Defence Force and the Central and East
African Railways (CEAR) are currently implementing the project and it is
estimated that the project will be completed by October this year. The project
will improve the transportation of tobacco, sugar, cement, fertilizer, fuel and
other strategic commodities within and outside the country.
I therefore wish, through you, Mr. Speaker, Sir, to thank
the
British Government, the DFID, the CEAR and the Malawi
Defence Force for their support for this very important project.
(7) The Pilot Integrated Rural Development Project
Mr. Speaker, Sir,
this house may recall that I have singled out the transformation of the rural
areas as the most effective ways of poverty reduction. In the past, attempts
have been made to promote rural development by providing some rural
infrastructure, but this has had little or no impact on economic growth and
development. This is partly because the infrastructure was not provided in an
integrated manner. Lack of one key infrastructure, for example, a road, water
or electricity, has in some areas, restricted the attainment of maximum
benefits from other already available infrastructure.
My government, Mr. Speaker, Sir, seeks to provide vital economic and social
infrastructure to most rural parts of the country instead of distribution of
money and other handouts. We want to improve on the policy approaches by
piloting an improved integrated rural development programme. In this regard,
the budget has put aside some funds to formulate a pilot Integrated Rural
Development Project which will be implemented in six districts covering all the
three regions of
Mr. Speaker, Sir, there are many other projects that will
be implemented in various sectors. What I have mentioned here is just a sample.
I wish to underscore that most of the projects that I have cited will be
financed by Malawi Government. Recognizing the limitation of resources from
Government, I would like to call on our development partners to financially
support these worthy projects.
REGIONAL
DEVELOPMENT PROGRAMMES
Mr. Speaker, Sir, Honourable Members of the House, in
addition to the priority programmes I have mentioned above, there are
a number of regional development programmes, with SADC and COMESA in which
Malawi is participating. In the near future, these projects are likely to be
implemented within the NEPAD framework. Some of them are as follows:
(1) The
Mr. Speaker, Sir, in an effort to improve our external
transport links, the Government is preparing a project that will seek to reopen
the transportation canal between the Zambezi and
to the
(2) The Nacala Development Corridor
Mr. Speaker, Sir,
the House recall that the Nacala Corridor is one of the most important routes
to the sea. In this regard, I am pleased to state that the World Bank has
approved a loan to finance the rehabilitation of this corridor. On the Malawian
side, this loan will contribute towards improving the track and replacement of
caveats, the purchase of locomotives, rolling stock, tools and equipment,
communication and safety equipment for the rail system. The Mozambican part of
the loan will finance the rehabilitation of the 77km stretch from the port,
upgrading of port facilities and the purchase of equipment. These measures will
certainly improve the efficiency of the rail network between
(3) The
Mozambique/Malawi Power Interconnector Project
Mr. Speaker,
Sir, as I have briefly stated earlier, work is progressing on this very
important project. The implementation of the project will improve the
reliability of power supply in the country. You may also wish to note that an
environmental impact assessment has been carried out to ensure that the project
is environmentally friendly and sustainable. A consultant is currently being
recruited to update the feasibility studies, design the transmission line and
associated substations and supervise the project during construction. A
contract document has been prepared and submitted to the World Bank for their
approval.
The project is expected to start between September and October 2004. A
Contractor who will carry out route survey is also being recruited to begin
work in the same period. A power purchase agreement was drafted and sent to the
prospective supplier. Signing is expected in September 2004. It is estimated
that the project will be implemented over a period of not less than two and a
half years such that it would be completed early 2007.
REMUNERATION FOR THE PUBLIC SERVICE
Mr. Speaker, Sir,
an important aspect of our economic growth strategy is to have a dedicated and
proficient public service. Therefore, in line with the need to make the public
sector more efficient and effective in its delivery of goods and services, my
Government has reviewed the salaries and conditions of service for public
servants including judicial officers, Civil Servants, the Police, the Armed
Force, Members of Parliament, Cabinet Ministers and Traditional Chiefs. I have
approved recommendation of study of this subject matter to increase the
salaries of the lower grades in the Civil Service significantly. The last time
that these salaries were increased was in the year
2000.
Mr. Speaker, Sir, in reviewing remuneration levels, my Government will
consolidate salaries and allowances into one salary. The effect of this
approach will be an increase in the salaries of these Civil Servants in the
2004/05 budget. Similarly, renumeration levels of Members of Parliament will be
adjusted upwards through this consolidation. The same will apply to those of
Cabinet Ministers. Due to resource limitations, these salary increases will be
phased over the next few years so as to avoid the erosion of the real salaries
by inflation. This process of reviewing the remuneration is hoped to result in
a situation
whereby our public service will be better rewarded and more motivated than they
are at the moment. As a consequence, Malawians will expect better services from
the public sector, and this is an important way of facilitating economic growth
and poverty reduction in our country.
CONCLUSION
Mr. Speaker, Sir, Members of the House, as 1 conclude my
opening address to this august House, I would like to underscore the point that
Malawi can and will get out of poverty. We shall keep our head above the water.
But we must recognize that nothing comes from nothing. We must work hard. Our slogan should be hard work,
more hard work, and even more hard work. We should not expect anything to come to us freely.
I would like to underscore that the budget that will soon
be presented to this House is a national budget. It is the budget of the
Government as well as the opposition. It is our budget. It is for this reason
that I appeal to all the Members of Parliament to take this session seriously.
Your deliberations should focus on addressing matters of national economic and
development significance. This House has the duty to ensure that the budget
will indeed contribute significantly to the economic prosperity of our nation.
We are all in this boat together, and together we will be drown or float. I
don’t want us to fail. We must keep our heads above the water.
Let me reiterate my Government’s determination to work with
all public officials regardless of their political beliefs. I am encouraged,
Mr. Speaker, Sir, to note that all Malawians want to have a well-managed
economy and to live in prosperity. This budget will put us on the road to
prosperity.
Mr. Speaker, Sir, Honourable Members of the House, I wish
you very successful and fruitful deliberations.
May God bless our country.
I thank you, Mr. Speaker, Sir.