Walk on a tight rope

Honourable Folks, I don’t know about you, but I see the 2014/15 national budget as a walk on the tight rope. There are quite a few pressure points that can trigger dizziness, make Malawi lose concentration and head for a catastrophic fall.

The K742 billion budget is branded “zero aid”, reminiscent of the disastrous 2011 budget dubbed “zero deficit”. Only that, while in 2011 it was government ditching donors and getting bruised in the process, this time it’s donors walking out on us.

To use the diplomatic language they prefer, they’ve frozen direct budgetary support, but continue to support our development agenda through other channels. Whatever that means, there’s a gaping K107 billion deficit!

That aside, the new budget assumes increased economic activity that would enable MRA to bring into the kitty K87.1 billion more tax revenue this year than last year. It also expects government departments to rake in non-tax revenue of K55.2 billion, a 3.7 percent from what they brought in last year.

While all this may be possible, failure to meet the targets will simply translate into further reduction of allocations to various ministries and departments which in turn will aggravate the poor delivery of public goods and services. Economies don’t grow under such circumstances.

We are safe if we meet or surpass the targets and that largely depends on the private sector which government owes K158 billion in unpaid bills. Chances are that suppliers should brace for more unpaid bills, especially if the revenue targets are not met.

On the expenditure side, a lot will depend on whether the APM administration has what it takes to spend for results, strictly within budget. If that miracle happens, it will define the transformative essence of the APM administration. It will also be a good entry to the second 50 years of independence.

The fact remains that all past governments in the 20-year history of multiparty politics in Malawi have failed either to spend within budget or to use public revenue effectively for results or both.

Our woes start with the perennial curse of corruption, fraud and other forms of wastefulness which cost us a third of public revenue a year.

If donors have ditched us amid painful economic reforms undertaken by the JB administration with their prodding, it’s on the grounds that government grossly failed on public finance management, allowing billions to be siphoned out of the kitty by a network of politicians, civil servants, bankers and businesspersons.

The APM administration has hiked the allocation to Anti-Corruption Bureau, Director of Public Prosecutions and Judiciary by an average of 80 percent—with the ACB getting the highest increase of 167 percent—just so they can conclude Cashgate cases.

Interestingly, much of government interest is on historic corruption cases suspected to have been committed during the JB administration. Government must be equally, if not more, concerned about bad guys who may be busy fleecing government coffers right now.

Perhaps the starting point is to probe why ACB sat and watched as unscrupulous civil servants displayed opulence—building very expensive mansions, driving expensive cars, splashing money in beer halls, etc., for years. Probing sources of such ill-gotten money is within the mandate of ACB. . If the interest is to woo back donors, the APM administration may have to bite the lower lip and expose skeletons in the DPP’s cupboard. It’s common knowledge that Cashgate dates back to the Bingu wa Mutharika era and precluding the party would render the probe look like a mere political witch-hunt.

The other pressure point is controlling spending on salaries in government. Already government workers have rejected the 24 percent pay hike. They say this is too little. Who can blame them when recently OPC recommended pay hikes for ministers from K600 000 to K3.5 million plus other perks?

We’ve also read about overspending even on votes for State residences and Parliament! People in government relax because they squander the wealth they don’t generate and salary increments are an entitlement even if there’s nothing to show for them. Will this mentality change? Not when even OPC fails to wake up and smell the coffee!