President Lazarus Chakwera yesterday took a swipe at commercial banks, accusing them of making profits at the expense of government.

In his two-hour State of the Nation Address (Sona) at the opening of the 2024/25 Budget Meeting of the 4th Meeting in the 50th Session of Parliament, he said banks have for over two decades been enriching themselves by lending government its own money at high interest rates.

Chakwera directed that moving forward bank accounts of Regulatory State-Owned Enterprises (SOEs) and statutory bodies be moved from commercial banks to the Reserve Bank of Malawi (RBM), adding that accounts of 22 SOEs have already been migrated.

According to the President, his administration will continue with the migration policy to include fully subvented organisations and commercial SOEs.

Said Chakwera: “My reason for doing that is simple: the practice over the past 20 years of having public bodies deposit their revenues with commercial banks so that government is made to borrow its own money at high interest rates for the enrichment of a few, is a practice that lacks seriousness, and you can go [and] tell whoever created that system that by the end of this coming fiscal year, I am shutting it down,

Gotani-Hara welcomes Chakwera at Parliament yesterday

“Whether anyone likes it or not, inch by inch and layer by layer, we are dismantling every part of this system that was put in place by people who were not serious.”

Among others, he also emphasised the need for the country to take advantage of the recovery in different sectors and build on it.

He highlighted progress registered in the Sustainable Development Goals (SDGs), food inflation and bringing back fiscal discipline in public finance management and cited the stabilisation of non-food inflation by adopting a tight monetary policy stance of raising the policy rate and the reserve requirement on domestic currency deposits in the wake of last year’s devaluation.

Said Chakwera: “Some of the pains being felt by Malawians stem from over 20 years of public policies that have effectively destroyed Malawi’s production and manufacturing … what Malawians deserve is an economy that is no longer sick, one that is able to compete.”

Another set of reforms government is determined to undertake is in the area of revenue collection, “including introducing a fairer tax regime; completing the ongoing review of the Value Added Tax Act and the Taxation Act”.

Government also plans to establish an Independent Revenue Appeals Tribunal to settle tax disputes between taxpayers and the Malawi Revenue Authority transitioning all revenue collection to a digitised e-payments system.

Chakwera delivers
his 2024 Sona

Turning to food security, the President indicated that with 4.4 million people unable to meet their annual food requirement as estimated by the 2023 Malawi Vulnerability Assessment Committee, government is giving a 50kg bag of maize to each affected household every month, adding that the intervention which started four months ago will run for six months.

The arrangement supplements government’s move to release maize from the Strategic Grain Reserves for price stabilisation through selling it at Agricultural Development and Marketing Corporation markets.

He also informed the House that land under irrigation grew by two percent in the 2023/24 financial year, and resulted in production of 342 000 metric tonnes (MT) of food crops and 515 000 MT of export crops.

“My administration has further mobilised K35 billion, to provide low interest loans to farmers and agriculture commodity processors for their wealth creation efforts. These funds are accessible through the Malawi Agriculture and Industrial Investment Corporation and the National Economic Empowerment Fund,” said Chakwera.

On tourism, Chakwera disclosed that government is in the process of designing a Malawi Flight Plan for increased air access and has concluded three bilateral air service agreements with Mozambique, Uganda, and Kuwait to introduce direct flights into Malawi.

He said talks are underway with the Democratic Republic of Congo, Mauritius, and Nigeria to do the same.

Through the Malawi Electricity Access Project (Meap), government has connected 58 000 households to the national grid against the target of 180 000 households to be connected by

 June this year to benefit over 790 000 people, while the Solar Home Systems component of Meap has connected 13 000 out of the targeted 200 000 households with 823 000 beneficiaries.

The President also unveiled an ambitious plan worth $300 000 from the World Bank to prepare policies for a conducive environment for electric vehicles, adding that an investor has been identified to bring 50 000 electric motorbikes for a start.

Meanwhile, Chakwera has indicated that 197 809 new jobs were created in the current financial year, bringing the cumulative total of new jobs since 2020 to 1.3 million.

He also touted government’s initiative and agreement with Israel, aimed at exporting 100 000 young people to Israel saying this will bring into the economy $6 million every year in remittances.

The President honoured fallen Malawi Congress Party (MCP) figures by announcing his intention to name two roads in the Lower Shire after Gwanda Chakuamba and Sidik Mia

The post  Lazarus rises to occasion first appeared on The Nation Online.

The post  Lazarus rises to occasion appeared first on The Nation Online.