The Malawi Parliament has passed a K511,269,522,794 billion kwacha budget that will enable government meet its expenditure needs for the first quarter of its 2019/2020 financial year.
The 2019 Tripartite elections coupled with President Peter Mutharika’s delay in announcing a cabinet, meant that the new Minister of Finance Joseph Mwanamvekha did not have enough time to present a fully-fledged budget.
Presenting the projected expenditure for 1st July to 31st October 2019 Mwanamvekha of the K511.2 billion, K410.5 billion would come from domestic revenues with K50.7 billion being grants, leaving government with a deficit of K16.5 billion to be covered by domestic borrowing.
There have been concerns over high levels of domestic borrowing which Mwanamvekha insisted in Parliament stood at around 4.1 percent of the country’s GDP.
“This [K16.5 billion is much lower as compared to K84.3 billion for the same period in the 2018/2019 budget. Government will reduce borrowing from 4.1 percent to 0.3 percent of the GDP,” Mwanamvekha said.
He also said around 35 percent of the projected expenditure -K135 billion kwacha go towards paying salaries of civil servants.
“The projections has been based on government Ministries, Departments and Agencies’ actual expenditure on wages and salaries, in addition, the estimate has taken into consideration the recent promotion of teachers and security officer,” said the Finance Minister.
The provisional budget will also cover Other Recurrent Transactions (ORT) and only those development projects that are ongoing.
The statement also projected that inflation would in the four months, hover at around 8 percent, while the kwacha will stabilise to around 750 to the dollar.
Opposition political parties while supporting the budget urged government to ensure it tightens the screws to ensure the funds are used for intended purposes.
Source : Kulinji.com