Germany government has questioned government’s plan to include new subsidies in the 2014/15 national budget saying the current unsound economic status of Malawi does not support such initiatives.
Germany Ambassador to Malawi Dr Peter Woeste said in an interview that currently Malawi is grappling with economic issues which has seen funding cuts to ministries and departments and adding a burden of new subsidies may just complicate the situation.
Ambassador Woeste said that it would be imperative for government to seriously put economic priorities right currently when direct budget support of 40% from donors is not available and now when the economic situation is hitting hard local citizens.
“The 40% that the donors are sharing in your national budget is way too much, but the need for economic independent is the way to go though, it needs a proper timeline to achieve that, so in general I am optimistic that government is looking for ways on how to finance its budget using locally available resources.
But interestingly at this critical time when government is struggling to find resources to finance activities we hear of new subsidies being introduced in the budget like that of cement and iron sheets, so looking at economic fundamentals I have certainly doubts on subsidies” He re-iterated that Germany will not resume direct budget support but rather the support will be rendered through projects on specific needs of the country’s citizens.
