Govt funds absorption by MDAs inefficient—assessment

Treasury says the absorption of government funds by ministries, departments and agencies (MDAs) is inefficient, with 57 percent of Government funds not being absorbed.

This is according to the 2022/23 Public Sector Investment Programme (Psip) published by Ministry of Finance and Economic Affairs.

This, it says, is a worrying situation, as it means that a large sum of money allocated to MDAs is not being used as it should be.

Said Treasury in the assessment: “The situation is further exacerbated by the fact that 13 percent of donor funds have also not been absorbed.

“Clearly, steps need to be taken to improve the absorption rate of government funds by MDAs to ensure that funds are used as efficiently as possible.”

Treasury data shows that of the 369 projects by MDAs for the 2022/23 fiscal year, the development budget had recommended financing 165 continuing projects and 41 new ones, while four unsuccessful projects were rejected.

Treasury had allocated K820.7 billion to accommodate 202 development projects at both central and local levels of government within the budgetary limitations of 2022/23.

In an accompanying statement to the assessment, Ministry of Finance and Economic Affairs Sosten Gwengwe said Psip highlights the significance of fostering private sector-led economic expansion and public-private partnerships in the delivery of public services.

This, he said, is essential to achieving development for the populace.

Said Gwengwe: “External assistance remains an integral part for the successful execution of the Public Sector Investment Programme, thus it is of paramount importance that the government and development partners collaborate more diligently than ever to enhance the efficacy of Public Sector Investment Programme, so as to guarantee the most beneficial outcome for the people of Malawi.”

On his part, Secretary for Psip Patrick Zimpita said in light of the limited fiscal space, it is essential that the programme is carried out in the most expeditious manner to realise maximum return on investment.

Psip was established with an emphasis on the accomplishment of the Malawi 2063 objectives and the Malawi 2063 First 10-Year Implementation Plan (MIP-1).