Effects of budget cuts

The battle is raging on the floor in Parliament. Legislators are subtly threatening to sabotage the 2016/17 National Budget if government does not get them personal loans from commercial banks at interests rates that the taxpayer will have to subsidise heavily.

Budget allocations are shrinking in real terms and in some cases, such as sports, the cuts are in absolute terms and brutal.

In the latest fiscal stress, retiring civil servants should forget, at least for now, about getting half of their pension packages in advance within 18 months to retirement. The portrait is ugly and Finance, Economic Planning and Development Minister Goodall Gondwe sums up the situation in cold hard facts.

“The fact that the budget is getting smaller and smaller than government needs every year creates a fundamental need for the prioritisation of government operations to ensure that only essential and affordable operations may be financed. I believe that this is the opportune time to seriously review Government functions with a view to streamlining operations within the available resources, in order to deliver better quality public services on a sustainable basis,” says Gondwe in his 2016/17 Budget Statement.

The result: a recruitment freeze even of nurses; suspension of some critical expenditures, which Gondwe describes necessary to sustain an economy laden with a domestic debt overhang of around K526 billion, which is nearly half the proposed K1.1 trillion budget.

Commentators worry of the long-term impacts of the expenditure cuts.

Commenting on budget cuts which have necessitated a freeze in recruitment in the health sector health rights activist Maziko Matemba said failure by government to recruit more nurses will likely put a huge strain on the already stretched health personnel in the country.

Said Matemba: “The decision not to recruit nurses this year will be mostly felt by the majority poor population in the rural areas. This is a category of people who solely rely on public health facilities. With the nurses and patient ratio not being in our favour, the only right thing government would do is to find resources to recruit more nurses to improve the country’s health service delivery.”

Malawi has one of the most inferior ratios of patient-to-health worker both in the region and globally.

Malawi’s nurse-to-patient ratio stands at 1:80 against the International Council of Nurses (ICN) recommendation of one nurse per average of six patients.

In the education sector, government will only recruit 10 500 primary school teachers and 477 secondary school teachers.

The recruitment of these teachers was postponed in the 2015/16 fiscal year, although most of the processes were already concluded. Gondwe only hinted that small recruitments in the health and agriculture sectors would be considered to avoid the disruption of frontline service delivery.

But executive director for Civil Society Education Coalition (CSEC) Benedicto Kondowe queried government’s

additional teacher training colleges (TTCs) when it is not taking up all teacher graduates in the country.plans to construct three

“The implication of reduction in the education budget is so enormous. There are already thousands of teachers who graduated and are waiting to be absorbed by government to reduce the teacher-pupil ratio which is one of the biggest in the region. Instead they want to add more TTCs which to me do not make sense. The amounts allocated to cater for teaching and learning materials and for infrastructure development are equally falling short of expected standards. This is more worrying especially as government has increased learning time for primary school pupils. It means there will be a lot of time wasted,” he said.

For University of Malawi’s Chancellor College-based economist Ben Kalua, the current expenditure freezes and cuts emanate from bad policy and signal fiscal stress.

“For a very long time the government has been putting a lot of money in non-productive areas. The lions’ share that the agriculture sector gets is normally put to waste. I believe that some of these cuts are not necessarily from the right sectors. They should have released the agriculture sector to make it more private-oriented.

Said Kalua; “Let government put this sector into a private public partnership kind of setup to make it more viable and profitable. That will save a lot of resources for other social sectors such as health and education which have also an economic side.”