Chikaonda faults govt over cost-cutting measures

Press Corporation Limited (PCL) chief executive officer Mathews Chikaonda has criticised the government of President Joyce Banda for not showing seriousness on cost cutting measures.

Speaking in Lilongwe on Saturday during a private sector – civil society leaders’ meeting with visiting International Monetary Fund (IMF) Managing Director Christine Lagarde, Chikaonda said the investors were looking for signals from the government that they were serious about austerity in spending.

“The Reserve Bank of Malawi has done well [in implementing tight monetary policy] but the fiscal [government side] is sending mixed signals in terms of expenditure containment,” said Chikaonda in apparent reference to reports of spending in the budget line for State Residences.

He said investors would want to know where the economy is going to by, among other things, having regular updates on government budget performance which, he said, was not the case presently.

“We need to examine and analyse ourselves [government] expenditure line. It was our expectation that such information will be made by public by the government, but that is not the case,” said Chikaonda, who previously served at Minister of Finance and central bank governor under the United Democratic Front-government.

In her remarks, Lagarde agreed with Chikaonda on the need for the government to send correct signal to the public about expenditure.

“It is important to manage expectations as well as more energy on continuation of things that are needed without sending mixed messages,” said Lagarde.

He said government expenditure should be restrained through prioritisation of programmes and not reduction in the nominal value of the budget.

Answering a similar question from a journalist later, Minister of Finance Ken Lipenga, while avoiding to comment on reports about specific over-spent budget lines, assured Malawians that the government was serious about controlling expenditure.

“We recently announced a number of cost cutting measures to demonstrate our commitment and we know that those are not enough and that we could do more,” said Lipenga.

President Joyce Banda has become under intense criticism from the public and civil society organisations over her frequent local and international travels with reports that State Residences has already overspent its budget line.

The reports of expenditure have confirmed general fears about the cost of the presidential expeditions to the tax payer.