Budget hanging in the balance

Budget hanging in the balance

Post was last updated: June 23, 2020

Sosten Gwengwe

Commentators say prospects of having Parliament passing the next budget by July 1 remains narrow, hence, the need for the Treasury to consider formulating a provisional budget.

However, the Ministry of Finance remains upbeat that the budget would have been passed by end of this financial year.

Parliament is expected to reconvene on Thursday to deliberate on the K2 trillion-budget which Finance Minister, Joseph Mwanamvekha, presented a week ago.

Initially, after going through cluster meeting, the house was meant to reconvene yesterday to start scrutinising the budget but Speaker of the House, Catherin Gotani Hara said the changes were effected to allow Members of Parliament to vote in the fresh presidential elections.

This means that Parliament would only have four working days before July 1 which is first day of the financial year.

Speaking in an interview Monday, Budget and Finance Committee Chairperson, Sosten Gwengwe suggested that the Treasury should make a resolution that the government should continue spending for the next three months while the country awaits the next financial plan.

“The whole reason we need a resolution and not a budget is because we want to give room for the government which is to be formed to prioritise the next budget as the budget cannot be passed when an election is on the table. We cannot pass a budget assuming this party will win,” Gwengwe said.

Last year between July and October the country used a K511.3 billion provisional budget following the May 2019 General Elections which were annulled this year.

Economics Association of Malawi (Ecama) president, Lauryn Nyasulu, concurred with Gwengwe, saying, it is necessary to have an alternative.

“Just before the budget session, one thing I highlighted is that it will be important to have a provisional budget because when we have elections, they collide with the end of the financial year and the parliamentarians, focus is on the elections not the budget,” Nyasulu said.

But Ministry of Finance Spokesperson, Williams Banda, said since the minister presented a full budget, it is up to the Parliament to decide what happens to the budget in line with the law.

“We know that the Minister presented a full budget and we will wait for Parliament to respond accordingly in line with the law,” Banda said.

The K2 trillion 2020/2020 budget has a fiscal deficit of K651 billion.

The government is set to borrow K490 billion domestically and K161 billion externally during the next financial year.

Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.

He is however flexible as he also writes about current affairs and national issues.

Source Link

Let us know what you think of this article and remember to add us on our facebook and follow us on our twitter. Come back daily for more Malawi business news.

Quick Links: Download Business eBooks | Ten Signs You Are An Entrepreneur | What is a Managing Director?