Malawi budgetary operations in K4bn surplus
Malawi Government budgetary operations registered a surplus of K4 billion, or 0.2 percent of estimated nominal gross domestic product (GDP), in October 2014. This is in contrast to a deficit of K21.1 billion in the preceding month, according to the Reserve Bank of Malawi (RBM).
The surplus—increase in revenue over expenditure—was used to repay part of the domestic debt, which peaked at K340 billion at a time Minister of Finance, Economic Planning and Development Goodall Gondwe was presenting the 2014/15 national budget in September this year.
The fiscal year’s budget, according to the 2014/15 draft financial statement, was supposed to end with a fiscal deficit position of K107.1 billion, which was supposed to be financed by foreign loans of K102.9 billion and domestic borrowing of K15 billion.
The borrowing was also expected to allow domestic debt repayment of K10.8 billion, which is equivalent to 0.8 percent of nominal GDP—a GDP figure not adjusted for inflation.
RBM, in the latest economic review for October 2014 dated December 29, said: “The improvement in the overall fiscal balances was attributed to an increase in revenues and a decline in expenditures.”
The review shows that total revenues increased by 31 percent to K50.8 billion while expenditures dropped by 21.9 percent to K46.8 billion. This followed another increase of 6.6 percent recorded in the month before.
“The outturn was ascribed to developments in both domestic revenues and foreign receipts. Domestically mobilised resources for the month under review increased by 32.3 percent to K48.8 billion from K36.9 billion registered in the preceding month,” said the review.
In the review period, tax revenues rose by 34.8 percent to K46.3 billion from K34.3 billion in September 2014 while non-tax revenues dropped though marginally by 0.5 percent to K2.5 billion.
At the same time, according to the review, foreign inflows in the review month increased marginally by 5.3 percent to K2 billion ($4.6 million) from K1.9 billion registered in September 2014.
Of the total $4.6 million, $2 million was earmarked for Health Sector Wide Approach (SWAp) from the World Bank.
Expenditure in October 2014 declined by 21.9 percent to K46.8 billion, following another decrease of 1.8 percent recorded in the previous month.
“The major expenditure items that registered declines were recurrent expenditures, domestic interest payments, salaries, statutory expenditures and development expenditures, which decreased by K6 billion, K4.7 billion, K3.2 billion, K2.5 billion and K2 billion, respectively,” said the review.
