Reserve Bank of Malawi maintains 5% inflation projection

‘Budget off-track’ – The Times Group Malawi

Post was last updated: March 1, 2021

GANDA—Clearly the performance is off-track

Chairperson of the Budget and Finance Committee of Parliament Gladys Ganda has said the performance of the 2020/21 national budget is generally unimpressive.

Giving her opinion on the Mid-Year Budget Statement presented by Finance Minister Felix Mlusu in Parliament on Friday, Ganda said the performance shows that the budget is off-track.

She was, however, quick to note that her committee would present its reaction to the budget in Parliament this week.

She was bothered with missing of the domestic revenue target by K35 billion in the first six months.

On the other hand, total expenditure at mid-year stood at K998 billion against a budgeted figure of K974 billion thereby surpassing its target by K24 billion.

“My opinion is that clearly the performance is off-track. Expenditure projections to the end of the fiscal year have been revised upwards by K144 billion, clearly showing government increased appetite for spending amidst depressed revenues which is unfortunate,” she said.

She said it was also noteworthy that there is unplanned expenditure of over K10 billion, leading to heavy borrowing from the domestic market.

On its part, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has described the budget as reasonable, considering the prevailing economic circumstances.

MCCCI Director of Business Environment and Policy Advocacy Madalitso Kazembe said the private sector mouthpiece would have loved if Mlusu could indicate the exact areas that would benefit from the increased budgetary expenditure in the second half.

Kazembe added that they expected Mlusu to spell out immediate plans of dealing with the growing debt while government is working on the Debt Retirement Fund.

“On payment of arrears, while we appreciate that government has considered payment of arrears, we would have loved to see how much has been set aside for that exercise. The government is silent on that part,” Kazembe said.

Speaking when he presented the Mid-Year Budget Statement, Mlusu said in order to support the business community during the Covid pandemic period, the government had commenced payment of public sector arrears as one way of injecting the much needed liquidity into the economy.

He said, under the programme, small and medium enterprises will be prioritised, adding that cash payments will be made on smaller amounts while promissory notes will be issued for large amounts.

 

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