Malawi Govt plans to change financial year
Minister of Finance, Economic Planning and Development Goodall Gondwe says government plans to change the financial year to the months of April and March.
Since 2010, the country has been running on national budgets running from July 1 to June 30—a cycle some argue that negatively affects annual procurement of agricultural inputs and government spending when it comes to electoral years.
This year, with the election of a new President, members of Parliament (MPs) and councillors on May 20, government was compelled to ask Parliament to pass a K210 billion provisional budget expected to run until October when the full budget will be tabled.
But speaking in an interview on the sidelines of this year’s prebudget consultations in Mzuzu on Saturday, Gondwe nodded to calls for government to consider changing the fiscal year since the current cycle coincides with the growing season.
“Before president Bingu wa Mutharika died, we had already agreed that the financial year would start from April [1] to March [31]. But when he died, it could not be resurrected,” the minister explained.
He said the new administration, under Bingu’s brother, Peter, intends to implement the plans to realign the financial year with the needs of the predominantly agricultural economy.
Gondwe reckoned that as early as January, government is usually in a better position to figure out what the economy is going to be like.
Earlier this year, Farmers Union of Malawi (FUM) president Alfred Kapichira-Banda called on government to make the shift to improve the procurement of subsidised farm inputs and ensure State produce trader, the Agricultural Development and Marketing Corporation (Admarc), starts purchasing farm produce in good time.
Banda said government funds Admarc as late as June, compelling farmers to sell their hard-earned harvest for peanuts to unscrupulous vendors prowling rural areas.
But on this, Gondwe said government will not shift the fiscal year to accommodate Admarc because the parastatal should not rely on government resources.
During the pre-budget consultations, Gondwe said government has set aside K1 billion (US$2 427 184.5) for roads rehabilitation in the Northern Region. The roads include Mzimba-Kafukule-Njakwa, Nkhata Bay-Mzuzu, Edingeni-Jenda and designing of Njakwa-Livingstonia and Rumphi-Nyika.
He said this in reaction to director of Church and Society of the Livingstonia Synod, Moses Mkandawire’s lament about the poor conditions of roads in the region.
Mkandawire also asked government to consider increasing the tax-free band from K20 000 (US$49) to K40 000 (US$97) and introduce a K3 000 (US$7) tax per annum to every person above 21years.
