House refers revised budget to committee of supply

 Parliament on Friday referred the revised 2023/24 Mid-Term Budget to the Committee of Supply for parliamentarians to scrutinise it vote by vote, starting from Monday.

Minister of Finance and Economic Affairs Simplex Chithyola-Banda thanked members who supported the budget during the general debate in the House following his presentation of the revised fiscal plan on November 20 2023.

Responding to concerns from the opposition bench on reductions to some budgetary allocations, the minister said the reductions in some departments’ budgets were due to cuts on external travels and benefits to senior government officials as part of austerity measures announced by President Lazarus Chakwera.

He said: “On austerity measures, my ministry will do a diligent job so that the revised budget responds well to the social economic issues that the revised budget seeks to address.”

He also promised the House that expenditure on the Affordable Inputs Programme (AIP) will be reported at the end of the current financial year, and that the 44 percent kwacha devaluation, which he said was a tough but necessary decision, will be properly cushioned.

Chithyola-Banda’s maiden financial plan adjusted expenditures by K540 billion to K4.33 trillion from the initial K3.71 trillion presented by his predecessor Sosten Gwengwe.

The 14.2 percent increase on the fiscal plan implemented from April 1 this year is largely meant to accommodate social protection measures that the Malawi Government seeks to implement to cushion vulnerable sections of the population from the impact of the 44 percent kwacha devaluation.

In the Mid-Term Budget Statement, government has re-introduced the price shock urban emergency cash transfer programme that will target 105 000 households in Mzuzu, Blantyre, Zomba and Lilongwe cities with a one-off cash transfer of K150 000 covering three months.

The statement also proposes to increase the social cash transfer levels by 57 percent and has raised the social cash transfer coverage from 10 percent to 15 percent of the population.

Civil servants have on average been given a nine percent pay rise after the minister raised the wage bill from K900.44 billion to K980.49 billion, almost 25 percent of the total budget.

To cover the shortfalls, Chithyola-Banda announced an adjustment in revenue projections by K500 billion from K2.5 trillion to K3.05 trillion, a 20 percent increase.

Out of the projected K3.05 trillion revenue, K2.24 trillion will be raised from domestic taxes and K645.94 billion in grants, among other sources.

The minister also announced that government will receive $240 million (about K408.0 billion) between now and the end of the current fiscal year in March 2024.

Responding to the Mid-Year Budget Review Statement, Democratic Progressive Party (DPP) spokesperson on finance Ralph Jooma wondered why the minister had cut Other Recurrent Transactions (ORT) figures for critical ministries despite the devaluation.

Said Jooma: “For instance, the following critical Ministries have had their ORT reduced despite the devaluation; Ministry of Education by K96 million, Ministry of Defence by K90 million, Ministry of Local Government by K35 million, Ministry of Lands by K146 million, Department of Immigration by K128 million.

“Ministry of Sports by K50 million, Ministry of Justice by K57 million, Director of Public Prosecutions by K40 million, Ministry of Transport and Public Works by K73 million, Human Rights Commission by K28 million and Registrar General by K17 million.”