Malawi’s Minister of Finance, Economic Planning and Development Goodall Gondwe has bowed down to pressure from members of Parliament (MPs) to increase funding to the health sector and Malawi Police Service (MPS).
In his wind-up speech following debate on the 2014/15 National Budget statement, Gondwe said he would add an extra K7.4 billion to the Ministry of Health out of which K2.5 billion would go to central hospitals and K2.5 billion to district hospitals.
He divided the remaining funds between procurement of anti-malarial and tuberculosis (TB) drugs totalling K1 billion and K966 million for immunisations.
This has raised the total health budget to K52.9 billion from K45.5 billion.
In its report tabled on Tuesday, the Budget and Finance Committee of Parliament had expressed concern over the budget cuts in the health sector for medical equipment from the proposed K4 billion to K3.1 billion and only provided K8.3 billion for drugs out of the required K33 billion.
To this, Gondwe responded: “An additional K500 million will be provided for procurement of diagnostic equipment and to cater for the rising number of cancer patients and preparation of the opening of the cancer centre, K150 million has been provided towards training of cancer medical specialists.
Reacting to the news, chairperson of the parliamentary Health Committee, Juliana Lunguzi, said she was happy and excited that their evidence-based approach to appealing for more funds had yielded results and thanked Gondwe for listening to the appeals.
To address the insecurity in the country as demanded by MPs, Gondwe said he would provide K500 million more to MPS for procurement of vehicles, 100 of which would go to rural police stations.
This is in addition to the K12.4 billion which was allocated to MPS.
However, all these additional allocations are not expected to bloat the K742 billion 2014/15 purse as Gondwe plans to withdraw K20 billion from the K50 billion initially allocated to servicing arrears.
Gondwe, who was erroneously mistaken to have been absent in the chamber when the Budget and Finance Committee presented its report on Tuesday, told the House that following concerns from the committee, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) and other stakeholders with regard to the arrears government owes the various suppliers of goods and services, the policy of settlement of arrears has been reviewed.
He said: “I am, therefore, pleased to announce that Zero Coupon Bonds will be issued to contractors and suppliers who are owed huge sums by government, particularly businesses, to discount their bonds with the commercial banks in order to immediately access money and improve the liquidity of their businesses.”
But only those whose arrears have been audited by a private auditor and are tax-compliant would be serviced in the coming two years.
On the 167 percent increased funding to the Anti-Corruption Bureau (ACB) which the Budget and Finance Committee said was not a true reflection, Gondwe clarified that it was in relation to the Other Recurrent Transactions (ORT) allocation since there was no development budget.
Reacting to concerns that there was still a need for budgetary support despite this being a zero-aid budget, Gondwe said government had no choice but to take the route, but it was still keen to receive support and discussions with donors were ongoing.