Principal secretaries (PSs) have been asked to cut budgets of their respective ministries as government embarks on implementing a bitter austerity plan with strict expenditure controls.
The development, announced by Chief Secretary to the Government George Mkondiwa, comes hot on the heels of International Monetary Fund (IMF) mission recommendations for Malawi to revise its national budget to reflect realities on the ground in an economy whose growth forecast has been trimmed from an initial 5.5 percent projection to three percent.
On Tuesday this week, PSs met in Lilongwe to discuss several new austerity measures. According to sources, they further signed contracts making the controlling officers responsible for management of their ministries’ finances.
Both Mkondiwa and Minister of Information, Tourism and Civic Education Jappie Mhango confirmed the meeting of the PSs.
Said Mkondiwa: “We met and discussed the plans, but for details ask the government spokesperson as we have briefed him of details of what we have discussed.”
Mhango said government intends to introduce austerity measures to beat the IMF December deadline to bring back on track the country’s economic programme, the Extended Credit Facility (ECF).
He dismissed suggestions that critical social services such as hospitals will be targeted by the austerity measures while senior government officials continue spending big.
“As Cabinet ministers, we have already taken some austerity measures. The number of foreign trips has been reduced, our salaries have not been raised since we came to power [in May 2014]. Everyone is going to be affected, but we will ensure crucial services such as health are prioritised and are not affected,” said Mhango.
Three weeks ago IMF declared Malawi’s programme off track and asked Minister of Finance, Economic Planning and Development Goodall Gondwe to revise the 2015/16 National Budget.
The fresh contracts for the PSs signed at the meeting, Solicitor General Janet Banda further confirmed yesterday, make PSs liable for prosecution and other disciplinary measures in the event of abuse of funds as per relevant laws such as the Public Finance Management Act and Public Audit Act.