Budget records K20.7BN surplus

The 2023/24 National Budget recorded a K20.7 billion surplus in July, a turnaround from a K51.5 billion deficit recorded in June, a latest Reserve Bank of Malawi (RBM) report shows.

The RBM report has attributed the positive turnaround to improved tax collection and grants.

This is the first surplus recorded by the Treasury in 17 months, a development economists say could be a step in the right direction.

Data contained in the RBM Monthly Economic Report for July 2023 shows that in the current financial year which started in April, deficits have accumulated to K247.5 billion.

But the report shows that the July fiscal outturn was also an improvement from a deficit of K53.4 billion recorded in the corresponding period in 2022.

The report further shows that total government revenues increased by 21 percent or K42.8 billion to K246.7 billion in July 2023.

Reads the report in part: “The increase in revenues was attributed to a 31.7 percent or K48.9 billion increase in tax revenues and a 21 percent or K6.4 billion increase in grants.”

The report indicates that expenditures, on the other hand, declined by 11.5 percent to K226 billion in July from K255.4 billion in June, attributed to decreases in both recurrent and development expenditures.

Reads the report: “Expenditure decline was on account of a 9.3 percent or K19.5 billion decrease in recurrent expenditure to K189.6 billion and a 21.3 percent or K9.9 billion decrease in development expenditure to K36.4 billion.”

Meanwhile, tax expert Emmanuel Kaluluma, who is senior tax consultant at EK Tax Consultants, said in an nterview yesterday the development signals an improvement in revenue collection modalities.

He said: “We have a lot that needs to be achieved in this financial year and this will only be achieved if our revenue performance is according to plan.

“Our appeal is that people who are responsible for the collection should keep up the pace and where possible loopholes that promote fraud, misuse of funds and corruption be closed.”

Malawi University of Business and Applied Sciences associate professor of economics Betchani Tchereni yesterday said there is need to ensure that revenue collection is maximised and funds are put to good use.

He said: “Our budget is running on deficits and every little amount that can be obtained is welcome. 

“There is a high propensity to abuse of such resources in government hence what is critical is that this is put to good use.”

Meanwhile, in the fiscal plan, Treasury has projected a fiscal deficit of K1.3 trillion, an equivalent of one-third of the K3.87 trillion 2023/24 National Budget.

At K1.3 trillion, the fiscal deficit is 8.7 percent of the country’s gross domestic product and below the recommended threshold of three percent.

Treasury projected tax revenue at K2.13 trillion and non-tax revenue at K114.34 billion in this fiscal year that ends of March 31 2024.