National News

Sadc, MEC choke government operations

Took over the Sadc mantle: Banda
Took over the Sadc mantle: Banda

Malawians are paying the price of hosting the Sadc Summit as the exercise’s unplanned expenses have created a gapping hole in the National Budget, forcing Treasury to cut public service funding.

The Nation has established that the Ministry of Finance has already directed that monthly funding to all ministries, departments and agencies as approved by Parliament be trimmed by half until the cash-flow situation improves.

The directive also follows a decision by Treasury to advance about K1 billion (about $2.5m) to the Malawi Electoral Commission (MEC) for the preparations of the elections next year, according to Ministry of Finance spokesperson Nations Msowoya.

Initially, government planned to spend K500 million (about $1 250) for the Southern African Development Community (Sadc) Heads of State and Government Summit which ended in Lilongwe on August 18 2013.

However, the budgeted amount shot up to K900 million (about $2.2m) after government paid a lump sum of K400 million (about $1m) as its annual membership fees to Sadc.

In an interview yesterday, Msowoya said the directive came after Lilongwe paid almost K400 million to the Sadc Secretariat as membership contribution and K1 billion to MEC.

Said Msowoya: “This [trimming] is a temporal arrangement and what we have told them [ministries and government departments] is to re-prioritise their activities. We will come back to normal funding depending on the cash flow.”

He said government is experiencing less cash flow than projected.

According to Sadc’s status of member States’ funding and remittances, Malawi’s annual contribution was at $1 888 000 (almost K660 million at current market exchange rate), but Msowoya explained that Malawi paid almost K400 million because the exchange rate being used is different from that prevailing on the market.

While acknowledging that most activities in different ministries and departments will be affected, Msowoya said the situation is “manageable” because the cuts are also looking at the nature of activities.

But Msowoya could not specifically say which ministries and departments would be spared to manage the impact of the cuts on essential services.

“It depends on the criticality of the departments and again the activities whose funding has been trimmed are operational,” he said.

Msowoya said while the funding for the electoral process is budgeted for and that the only hitch is that MEC wanted advance resources, the Sadc contribution has affected the cash flow because it was a one-off payment.

He said previously Malawi was paying the contribution monthly.

“I don’t know what really happened, but we have this time around paid a lump sum towards the contributions,” he said.

Some sources within government circles fear that the directive was a result of over-expenditure towards the cost of hosting the summit, arguing that K1.4 billion would not be an amount to adversely affect funding to almost all ministries and departments.

However, Msowoya said Malawi spent the K500 million as given to the organisers of the summit and nothing beyond that.

The funding cuts come at a time when the Office of the President and Cabinet (OPC) is failing to pay allowances to drivers, some of whom were driving Heads of State and Government and other dignitaries during the summit.

Related Articles

Back to top button