Minister of Finance Economic Planning and Development, Dr Goodall Gondwe Friday announced in parliament that government would increase salaries for junior public servants from December this year.

This, Gondwe said is one of the main feature of the 2015 /2016 national budget and is going to push up the wage bill from MK198.0 billion in 2014/15 financial year to an estimated MK228.7 billion.

The finance minister, who presented a MK 901.6 billion 2015/2016 National Budget at Parliament , revealed that the design of the draft financial plan for this year was characteristically reflective of the diminishing size of the resource envelope available to the Government, as a percentage of Growth Domestic Product (GDP) against the pressure of growing needs to provide critical public goods and services.

He said among the key features of the budget, total expenditure and net lending in the 2015/16 budget was projected at MK901.6 billion.

“Within the figure of Total Expenditure and Net Lending, we have included resources that will be spent on very important Government programmes. In the aggregate, the House will note that it is projected that Recurrent Expenditure will be MK674.6 billion, while Development Expenditure will amount to MK224.0 billion.

“Within the recurrent expenditure allocation, however, it is proposed to increase wages and salaries by an amount that will raise the salaries of the junior grades in the public service,” explained Gondwe.

He further stated, “The budget also provides for the recruitment of some 10,500 primary school teachers and 466 secondary school teachers, who are projected to join the civil service during the last quarter of the financial year. These initiatives as well as an annual wage creep scheduled for implementation in December 2016 will raise the Wage Bill from MK198.0 billion in 2014/15 fiscal year to an estimated MK228.7 billion.”

Summarizing the whole budget, Gondwe said the draft budget assumes an optimistic macroeconomic outlook for the next financial year, projecting an inflation rate decline of up to 16.4 percent during 2015/16 financial year.

He then said government also projects a general decline in interest rates, based on the expectation that the Reserve Bank of Malawi policy rate would be reduced in response to the dampening trend in inflation.

Further, it is expected that the exchange rate will be more stable than it was during the 2014/15 financial year giving hope of registering a higher real growth rate of about 7.0 percent in 2015/16 fiscal year.

Gondwe disclosed that total revenue and grants are projected at MK763.5 billion in 2015/16 national budget representing 22.2 percent of the country”s GDP. This, the minister said is a lower share of GDP than the revised figure for the 2014/15 of MK683.3 billion, which represented 24.2 percent of Growth Domestic Product.

This decline in total revenue, and grants as a share of GDP, Gondwe said is due to the continued decrease in donor grants, which amounted to MK132.8 billion in 2014/15 financial year, but are projected to decline to MK97.1 billion in the 2015/16 national budget.

“It is worth noting that even project grants, which remained buoyant in the past, are projected to decline from MK71.5 billion in 014/15 to MK52.9 billion in2015/16. Moreover, dedicated grants are projected to decline by about MK10.6 billion relative to the 2014/15 revised figure of MK47.6 billion,” the Minister explained.mana

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