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Councils to get funding today—Treasury

Ministry of Finance and Economic Affairs has assured the country’s local government councils that they will receive their outstanding funds by today.

The ministry’s director of public finance management systems Martha Chizimba told the Parliamentary Committee on Local Authorities in Lilongwe yesterday that the Reserve Bank of Malawi (RBM) has already started the process of crediting council accounts.

Capital Hill

She said this after the committee queried the ministry on why local authorities were being starved of funding for development and other recurrent transactions (ORT) since November last year.

In response, Chizimba said the Treasury released funding for the local authorities earlier this month, but the processes could have delayed disbursement. She said the money goes through the Accountant General’s office and RBM before getting to the councils.

“But let me assure you that the RBM has started crediting councils with the process expected to be completed by Friday [today],” she said.

Chizimba said the funds being credited include ORT and Constituency Development Fund, adding that Treasury has also started consultations on the development of a fiscal decentralisation policy to support decentralisation of funding.

A fiscal decentralisation policy empowers councils with resources needed to deliver services to the public. It transfers from the central government to local authorities the power to collect revenue and spend money.

Currently, there is only the national decentralisation policy which provides for the transfer of five percent of the net national revenues to local authorities.

Chizimba said Treasury has been doing internal consultations on fiscal decentralisation policy and in February will start consulting external stakeholders on the policy.

In his remarks, committee chairperson Horace Chipuwa said they will follow up on the Teasury’s assurance to ensure that councils are funded by today.

“Councils need funding to deliver services and development projects in constituencies which have been heavily affected by the lack of funding,” he said.

According to the Malawi Local Government Association, the funding that has not been provided includes K14.4 billion for CDF, K1.3 billion for school improvement programmes and resources for drugs in district hospitals.

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