Malawi Mid-Term Budget: Goodall seeks extra K32 bn
Malawi Finance Minister Goodall Gondwe on Friday revealed that the implementation of the 2014/15 zero-aid budget faced setbacks, key among them the under collection of domestic resources and under-performance in grants.
Gondwe, presenting the 2014/15 Mid-Year Review Budget statement, said government missed its target on both domestic revenue—which comprises tax and non-tax revenue—and grants by K36.6 billion.
However, the minister—who proposed a supplementary expenditure amounting to K32 billion—said government has under-spent by 1.5 percent of the total expenditure of the targeted K365.7 billion by mid-year.
The under-performance in domestic revenue and grants comes amidst continued suspension of budget support by Malawi’s major donors, creating a huge fiscal gap that forced government to craft a zero-aid 2014/15 budget which assumes no budget support.
If the proposal for the additional K32 billion is granted, the total budget will be revised upwards to K780 billion from the initial K748 billion approved 2014/15 fiscal plan.
“This requested extra funding is due to interest bill that increased by K26 billion and the Farm Input Subsidy Programme (Fisp) that increased by K10 billion,” Gondwe said.
He said other recurrent transactions will, however, be K4 billion lower than expected, demonstrating a good amount of fiscal discipline during the half year.
He said out of the K32 billion increased resources, K13 billon will be pledged additional grants, K8 billion will be excess tax revenue from existing approved taxes while K10 billion will be borrowed locally.
The minister disclosed that by mid-year, five out of 53 votes cannot operate up to the end of the financial year because they will have exhausted their resources.
He proposed scaling down of the 2014/15 development programme to the five votes and transferring resources between votes as necessary.
The notable votes that have overspent include the Malawi Defence Force (MDF) which spent 63 percent of its annual vote by December 31st, 2014, the National Assembly (63 percent), the Accountant General’s Department (60 percent), the Malawi Police Service (156 percent), the Malawi Electoral Commission (99 percent) and the Immigration Department (62 percent).
“These, therefore, are among the votes that will require supplementary resources to allow them to operate to the end of the financial year,” he said.
Commenting on the key components of the budget, Gondwe said total revenue and grants were targeted at K313 billion but by end of December 2014, both domestic revenue and grants under-performed by K36.6 billion.
During the minister’s presentation, conspicuously missing were representatives from civil society organisations (CSOs) and the donor community.
Malawi Economics Justice Network (Mejn) executive director Dalitso Kubalasa said the organisation missed the session due to “other pressing issues.”
