Treasury posts K42.6 billion surplus in November—RBM

Malawi Government budgetary operations recorded a K42.6 billion surplus in November 2023, Reserve Bank of Malawi data shows. This is the second surplus to be achieved in the current fiscal year

The feat is an improvement from the K46.4 billion deficit recorded in October 2023 as well as a deficit of K104.4 billion registered in November 2022, according to the November 2023 RBM Monthly Economic Review.

The first budget surplus of K20.7 billion this fiscal year was recorded in July.

Reads the November 2023 RBM Monthly Economic Report: “This outcome was explained by increases of non-tax revenue and grants.

“However, tax revenues declined by K47.7 billion [22.5 percent] to K164.2 billion in the month under review.”

Meanwhile, Treasury expenditures increased by 26.7 percent from K81.7 billion to K387.4 billion in November 2023 from K305.7 billion in the previous month.

This outturn followed a K54.8 billion increase in recurrent expenditures to K306.5 billion and a K26.9 billion rise in development expenditures to K80.8 billion during the period under review.

In the current financial year, Treasury slashed the fiscal deficit as a percentage of the total budget by 13 percent to K1.27 trillion.

Economic analyst Bond Mtembezeka, in an interview, said the perennial deficits and the gradual increase in budget allocations to interest payment show that the country borrowed extensively in the past and is now experiencing the fallout from that period.

He said: “When an economy is committing more resources to servicing debt as opposed to development projects, it means it borrowed more in the previous period and it is taking away a lot from the present period which leaves little room to invest for both the present and the next period.”

Malawi is currently classified as a country in debt distress with the total public debt stock at K14.7 trillion or 76 percent of GDP, according to IMF data contained in the latest country report released last month.

In an earlier interview, economist Gilbert Kachamba said it is common for a country to run fiscal deficits but what matters is how the government uses the funds to ensure that the deficits are “sustainable and impactful”.