Another tough task for Mlusu


By Feston Malekezo

Minister of Finance Felix Mlusu is back in town soliciting views to be incorporated in the next budget, the third for the Tonse Alliance-led government.

Mlusu and his team at the Treasury will be crafting the next budget on a precedence of a myriad challenges as the budget faces weak fiscal environment leading to a wide deficit.


The current financial plan has largely also been characterised by expenditure overruns and revenue shortfalls.

Already, the nine-month 2021- 22 National Budget recorded a K209 billion deficit from July to September as expenditures far outweighed revenue—a perennial challenge for Malawi.

This could not come as a surprise considering that Mlusu made a provision of a K718. 3 billion deficit come March 31 2022.


Figures from the Reserve Bank of Malawi (RBM) show that during the period under review, total revenues amounted to K346.1 billion while expenditures hit K555.5 billion.

Consequentially, to fill in the gap, the government resorts to borrowing. And within a year, Malawi’s debt stock went up by 32 percent from K4.1 trillion in June 2020 to K5.5 trillion.

Addressing delegate to the pre-budget consultations meeting in Mzuzu on Friday Mlusu said borrowing to fill in the gaps remains the available remedy now as revenue mobilisation only covers for about 70 percent of the total budget.

“Borrowing will still be there but it’s not like we have huge appetite for it, if we can be able to mobilise resources on our own, then we are going to narrow the gap,” he said.

Mlusu was then at pains to explain challenges surrounding the Integrated Financial Management made some Ministries Departments and Agencies (MDAs) unable to receive their Other Recurrent Transactions allocations.

The government’s purse keeper—pointed fingers on people managing the system, saying the system itself was faultless.

Ironically, since the new system was rolled out, there have not been concerns of salary delays.

The economy is also facing numerous challenges including an elevated cost of living coupled with dwindling of the buying power partly brought about by the Covid pandemic.

To ease the pressure, commentators are apparently, calling on the government to consider revising upwards minimum wage and tax bracket to K100,000 and K200,000 respectively, a suggestion Mlusu said will be reviewed accordingly.

The suggestion comes as currently an average family needs about K221,000 per month to live a decent life an amount which has gone up from K207,000 in September. Currently, minimum wage is at K50,000 while tax free bracket is at K100,000.

In his remarks, Executive Director of Church and Society of the Livingstonia Synod of the CCAP Moses Mkandawire suggested that domestic revenue mobilisation could be strengthened by among others curbing corruption and controlling some travels by the presidency.

“Let the leadership start suffering with the people by controlling travels, look at the way we are financing statehouses for example we can reduce the budget and add some of the money to the Ministry of Health and all the luxury that goes to the president and all levels. But also if you look at the some of the parastatal bodies instead of generating money for the government, they are parasites,” he said.

The meeting drew members from Civil Society Organisations, faith based organisations; business sector, the academia among others. Similar, meetings will also be held in Lilongwe and Blantyre.

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