Lower donor pay-outs hit 2022/23 fiscal plan

Treasury says lower disbursements of grants from both foreign governments and internal organisations resulted in reduced activities planned for the first-half of the 2022/23 fiscal plan.

In its recently published 2022/23 Budget Performance Report (Q1 & Q2), Treasury says there is need to revisit the assumptions made on grants vis-a-vis the projects as this will directly affect the public sector investment programme implementation.

Reads the report in part: “In the First Half of the 2022/23 Financial Year, government expected to receive K153.84 billion as grants from international organisations [multi-lateral donors] and K27.87 billion from foreign governments.

“Overall, grants underperformed by K49.56 billion largely due to lower than anticipated disbursement from both foreign governments and internal organisations resulting from reduced activities. There is need to revisit the assumptions made on grants vis-a-vis the projects as this will directly affect the public sector investment program implementation.”

For the 2022/23 Financial Year, the projected resource inflows from grants amounts to K320.33 billion, of which, K41.91 billion was from foreign governments and K278.42 billion from international organisations.

These were in form of program grants and dedicated grants in support of both recurrent and capital expenses.

Meanwhile, Treasury has since revised upwards by K58.9 billion from K320.3 billion to K379.3 billion by the end of the financial year, representing 18.4 percent increase.

Minister of Finance and Economic Affairs Sosten Gwengwe said the revision is on account of the net increase of current grants from international organisations and foreign governments

“This upward adjustment reflects additional confirmed disbursements from development partners,” he said.

National Planning Commission (NPC) director general Thomas Chataghalala Munthali said the challenge of low implementation rate by government ministries, departments and agencies needs to be addressed to keep pace with the country’s development agenda.

“If it is an issue of implementation and absorptive capacity challenges, then authorities need to build the capacities with urgency. If it is negligence, then those responsible need to be held accountable,” he said.