When priorities Are upside down

Figures compiled by the Ministry of Finance, Economic Planning and Development show that the Presidency has received up to 70 percent of its annual allocation in the 2019/20 National Budget five months into implementation of the fiscal plan.

In contrast, some key ministries received as low as eight percent of their annual allocations during the same period, according to the report dated November 2019.

Ministry of Health was allocated 29 percent of its total allocation, Ministry of Agriculture, Irrigation and Water Development a paltry eight percent, Ministry of Education, Science and Technology got 32 percent and Ministry of Natural Resources, Energy and Mining was allocated nine percent of its budget, the report shows.

The report also shows that State Residences, whose vote is directly linked to the President, received the highest allocation at 70 percent of the 2019/20 financial year.

During the same period, the Office of the Vice-President received 72 percent of its funding while the Office of the President and Cabinet (OPC) got 77 percent.

In the K1.7 trillion 2019/20 National Budget, State Residences vote was given K7.4 billion but had received K5.7 billion as of November 2019.

The monthly vote-wise expenditure report for November 2019, posted on the website of Ministry of Finance, Economic Planning and Development, indicates that the OPC spent 50 percent of the K5 billion it received as part of its K7.2 billion annual budget allocation.

For the Office of the Vice-President, the report says it was allocated K5.6 billion in this financial year and had consumed 65 percent of its funding in the five-month period from July 1 to November 30 2019.

This expenditure pattern, set to be confirmed and explained during the Mid-Year Budget Review Meeting of Parliament from February 10 to 28, could be contrary to government’s talk on its key priority areas.

But Treasury is currently keeping its fingers crossed with spokesperson Davies Sado saying the ministry is analysing figures in terms of mid-year performance both on revenues and expenditure.

He said: “After the analysis, we will come up with a direction for the second half of the financial year. However, all in all, we are anticipating a good performance in the second half of the financial year.

“We will build on the economic gains we have achieved and continue observing financial prudence.”

The budget is seemingly stretched with available figures from the Central Bank showing that in the five-month period to November 2019, Treasury posted deficits.

The figures show that at the start of this financial year in July, Treasury posted a K34.1 billion deficit, a drop from a K54.9 billion surplus recorded in June.

This was followed by other deficits of K41.1 billion in August, K17.7 billion in September and K12.9 billion in October. The figures show that government closed November with a K26 billion budget deficit.

On an average, the figures translate to a deficit of 26.2 percent in the five months, a development that puts a dent on the budget which is likely to be filled with tax revenue.

Presidential press secretary Mgeme Kalilani was yet to respond to our questionnaire by press time as did spokesperson in the Office of the Vice-President, Charles Wahara.

In his reaction, Budget and Finance Committee of Parliament chairperson Sosten Gwengwe described the situation as unfortunate, saying it is high time government imposed appropriate sanctions across the board against excess expenditure.

He said: “The country is in a mess of the morality of our leaders. It is time we make statutory votes go through scrutiny of members of Parliament whether its additions or subtractions because in the end, we will talk about these things, but things will remain the same because of our own way of doing things.

“Any moral leader should put the interest of the people first. Agriculture, energy, health and education should be priorities regardless of our standing orders.”

Over the years, State Residences and the OPC have been known for excess spending.

In 2012, during Joyce Banda’s reign as head of State, State Residences spent K2.6 billion (about $7.9 million), K800 million (about $2.4 million) more than its K1.8 billion annual allocation for the financial year ended June 30 2013, by November 2012.

Economic commentators and other analysts have since decried the development, saying it is likely going to affect other budget lines to cover them up.

Education activist Steve Sharra noted the situation is an issue of concern where, as a country, are we seem to prioritise certain  functions of government leaving out others.

He said: “When it comes to education, the record is that we think, deem and talk that education is important and give the biggest chunk to education but when you see the conditions on the ground you have contrary what is said on paper.”

On his part, Malawi Health Equity Network executive director George Jobe said amid any competing priorities, disbursement to the health sector should be timely and according to the budget.

He said: “We need to analyse where did the 30 percent go and what percentages of the other sectors it served. For instance, of the 30 percent, how much went to the essential health package?”

In a separate interview, agriculture policy analyst Tamani Nkhono-Mvula said it is unfortunate that agriculture, being a key area, is less funded. He said the development will exert pressure on the country’s food situation.

Taking her turn, Economics Association of Malawi (Ecama) president Lauryn Nyasulu said the budget performance shows great variations in the budget utilisation where key sectors of health, education, energy and agriculture have budget utilisation rates not exceeding 30 percent.

She said the present scenario is worrisome since the budget is already facing budget cut threats due to underperformance of revenue collection.

Said Nyasulu: “For cost centres with very high budget utilisation, it is important to appreciate the expenditure drivers for such cost centres. If the bulk of such expenditures are recurrent in nature, government may need to get a handle on such expenditures to avoid expenditure overruns.”

During presentation the budget in Parliament last September, Mwanamvekha said the fiscal plan was anchored on ensuring debt sustainability, inclusive growth and economic empowerment. Ministry of Education, Science and Technology was allocated K142.2 billion, Ministry of Agriculture, Irrigation and Water Development K167 billion and Ministry of Health got K101 billion.