Unicef Malawi says consistently high budget deficits over the past five years have increased debt servicing costs ahead of allocations to all key social and economic sectors.
In its analysis of the debt situation in relation to the national budget, United Nations agency said that debt servicing costs have grown by 56.3 percent during the year, accounting for up to 43 percent of domestic revenues and 24.3 percent of total government expenditure.
At 42 percent or K1. 455 trillion, public debt interest gets a lion’s share followed by use of goods and services at K845.5 billion, grants to other government units at K412.4 billion and social benefits at K358.6 billion, according to the analysis.
Reads the analysis in part: “Against this background, Unicef encourages the government to continue prioritising social spending, including for key social protection programmes to help cushion the vulnerable, considering the frequent shocks and rising inflation.”
In an interview on Thursday, Mzuzu University economist Christopher Mbukwa expressed concern over little sectoral allocation to critical social sectors.
He said: “The little allocation to critical sectors of energy, mining, industry, trade and tourism is a testament that our budget is not aligned to the Malawi 2063 and the First 10-Year Implementation Plan [MIP-1].
“Each of these sectors features highly in Malawi 2063 as key catalysts of economic growth and development.”
Mbukwa observed that with the low allocations to the energy sector, it will be difficult to achieve energy access of about 90 percent by 2030.
He said: “Talk of mining, it is a sector with huge potential to generate revenues, but our pace to actually start exploration of some minerals is quite slow.
“Other than the sluggish approach in ensuring that we start exploiting some minerals discovered in some parts of the country, our budgetary allocation to mining doesn’t depict that we prioritise this sector.”
Minister of Finance and Economic Affairs Simplex Chithyola Banda is on record as having said “the 2024/25 National Budget reflects the government’s continued commitment towards achieving the people’s aspirations as outlined in the Malawi 2063”.
