Lilongwe, February 7 (MaraviPost): – Goodall Gondwe Malawi’s Finance Minister on Friday presented a 2014/15 mid-year budget review statement to parliament in which he proposed a $64-million supplementary expenditure.
The Finance Minister said that implementation of the zero-aid budget had faced setbacks due to the under-collection of domestic resources and a lack of grants from donors.
He presented to Parliament that the Mutharika government had missed its target for both domestic revenue – which includes both tax and non-tax revenue – and grants by some 36.6 billion Malawian kwacha (roughly $73 million).
“This requested extra funding is due to an interest bill that increased by 26 billion Malawian kwacha [some $52 million] and the Farm Input Subsidy Program, which increased by 10 billion Malawian kwacha [about $20 million],” Goodall Gondwe told Parliament.
This shortfall in domestic revenue and grants comes amid the continued suspension of budget support by Malawi’s chief donors – a situation that has created a large fiscal gap. The problem has also been exacerbated by the un-imaginable financial hardship the Floods have caused to the already week economic foundation.
Donors pulled aid out of Malawi following revelations that public resources had been pilfered in a corruption scandal known locally as “Cashgate.” Auditors claim the government lost close to $100 million as a result of the fraud.
Malawi was left with no choice but to craft a zero-aid budget for 2014/15.
If the proposal for the additional $64 million is granted, the total budget will be revised upwards to $1.5 billion from an initial $1.4 billion approved in the 2014/15 fiscal plan.
Because of the budgetary failures, Goodall Gondwe is asking parliament to ensure that the government scales down some of its 2014/15 development programs.
Government agencies that have overspent include the Malawi Defense Force, which spent 63 percent of its annual vote by December 31; 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,” Gondwe said.
Opposition parties, MCP and PP however, criticized the minister’s statement as “empty.”
Malawi Congress Party spokesperson Joseph Njobvuyalema said Gondwe had failed to explain how the government had implemented the Farm Input Subsidy Program, as well as the cement and iron-sheets subsidy.
“We did not hear how the two main projects aimed at poverty reduction have performed,” Njobvuyalema said speaking to Media.
Opposition parties said they expected Finance Minister Goodall Gondwe to provide details on how the government had dealt with its outstanding debts to the country’s private sector.
Uladi Mussa, a member of the People’s Party, said his party in a mocking voice would have loved to hear about “the magic” that had led to the stabilization of the local currency.
