DPP, committee scrutinise revised Mid-Year Budget

The Budget and Finance Committee of Parliament and opposition Democratic Progressive Party (DPP) yesterday took turns to scrutinise the Mid-Year Budget Statement and gave a verdict that it is more consumptive than productive.

The two entities also faulted the increase in public debt by K1 trillion during the past six months.

Making the DPP response to the Mid-Year Budget Review Statement Minister of Finance and Economic Affairs Sosten Gwengwe delivered in Parliament in Lilongwe last Friday, the party’s spokesperson on Finance Ralph Jooma expressed concern that in the last six months the development budget has underperformed by K106 billion while recurrent budget has shot by K137 billion.

He observed that in the past half year, government borrowed K525 billion to cover its revenue shortfall and that the total national debt has jumped from K6.3 trillion to K7.3 trillion within that period.

Said Jooma: “The budget that was developmental when this Parliament passed it has been converted into a highly consumption budget.

“I have said it before a number of times, the recurrent budget should exist to support the development budget. If there is no development budget, there should be no recurrent budget.”

He said if the recurrent budget is overspent amid a development budget that is underperforming, chances are high that a good number of civil servants are being paid for doing nothing.

Jooma also said DPP was surprised that the budget does not include details of projects whose budgets have been adjusted. He cited the transport sector where government is proposing a reduction in roads construction allocation from K111 billion to K59 billion and a K40 billion reduction in the health sector development budget.

“The other example is Ministry of Health. Their budget has been cut by K40 billion and nobody knows which projects will face the cut. This is not good budgeting habit,” he noted.

Jooma also faulted government for failing to manage debt, saying debt is escalating at the fastest speed under Tonse Alliance government.

He questioned how government accumulated a K1 trillion debt in six months.

Jooma also wondered why the budget has not allocated more resources towards the Affordable Inputs Programme (AIP) and maize purchases when maize prices have tripled.

The AIP budget has been maintained at K109 billion while that of maize is at K12 billion. He feared that more people will be food-insecure.

Budget and Finance Committee chairperson Gladys Ganda said her committee also noted that the development expenditure has underperformed by 25 percent as only K313 billion was spent at mid-year against the projected K408.7 billion expenditure.

The rise in public debt by K1 trillion also did not please the Budget and Finance Committee of Parliament as Ganda said the amount was too big.

“Government should explain how this increase came about,” she said.

Ganda advised government to control borrowing and cut expenditure as a way of dealing with debts.

Both Jooma and Ganda congratulated Gwengwe for the $6.8 billion grant agreement signed yesterday as well as the Rapid Credict Facility with the International Monetary Fund.

Leader of the House Richard Chimwendo Banda described Jooma’s response to the budget as fair. Parliament will today continue to debate on the Mid-Year Budget review.