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Austerity joke

John Kapito

YET TO RESPOND—Zamba

On May 31, 2022, President Lazarus Chakwera announced a raft of measures seeking to cut public expenditure. But evidence of taxpayer-funded lavishness among cabinet ministers shows that these measures are nothing but a slap on their wrist

By Deogratias Mmana

On May 31, 2022, President Lazarus Chakwera – in a move seen as government’s desperate attempt to win favour with the International Monetary Fund (IMF) to hand the country’s imploding economy a lifeline in the form of an Extended Credit Facility — announced a catalogue of austerity measures for public officials.

One of those measures which he announced was a 20 percent reduction of fuel for cabinet ministers. But this measure does not mean much in terms of cutting government expenditure through cabinet ministers’ perks, we can report.

Here is why:

When the Tonse Alliance took over power in June 2020, the Chakwera administration revised the benefits and entitlements for ministers and their deputies — effective July 1, 2020.

The entitlements included these ones:

Other benefits were:

Then there is the fuel allocation.

In that June 2020 revision, government included K400,000 worth of “additional fuel paid together with salary” per month, plus, as gathered from an insider at the Office of President and Cabinet, 1,200 litres of fuel (about K1,764,000) provided by the office each month.

Going by these figures, a 20 percent cut, as announced by the President on May 31, translates to K432,800 worth of fuel, leaving them with a total of K1,731,000 worth of fuel per month.

We took these figures to Director of Research and Consultancy Milwad Tobias for his assessment. He described the allowances as outrageous for a country where 50.7 percent of the population lives below the national poverty line of K165,879 per person per day.

“Those employed by poor people are earning huge amounts of money, tax money paid by the same poor people. These entitlements are not for a donor-dependent nation,” Tobias said, adding: “Under poverty-stricken people, these obscene allowances must be removed.”

He further said: “The entitlements in Malawi are out of reality. A minister has fuel entitlement worth more than the salary of a Principal Secretary. A Principal Secretary has fuel entitlement worth more than a salary of a middle level manager in civil service. It is a scam.”

Tobias said the directive to effect 20 percent fuel reduction for ministers should be complementary and not substitute the broad reviews of the entitlements and changing the Fleet Management Policy as announced in the 2022 Budget Statement.

Tobias said the motor vehicle loan should be scrapped, adding that it is unethical to grant a loan to a person who is not on a contract.

“A minister is appointed and dropped at the prerogative of the President. What happens when they are dropped before servicing the loan?” He wondered.

Our analysis of budget allocations to the councils for 2021-2022 financial year shows serious under funding to local councils, which is inconsistent with the decentralisation agenda.

The councils, which are supposed to serve people’s development needs, are living on shoestring budget.

For example, Balaka District Council had an approved amount of K81.5 million General Resource Fund for the 2020 — 2021 fiscal year, translating into K6.8 million per month.

Sectors such as forestry had an annual approved general resources fund budget of K2.5 million, translating into K213,300 monthly cash flow. The infrastructure development fund had an annual approved allocation of K11.4 million translating into around K950,000 monthly funding.

In Blantyre city, only 17 percent of approved development budget from local resources was disbursed.

Consumers Association of Malawi Executive Director John Kapito also described the ministerial entitlements as obscene.

“This is really obscene. No one expects and would understand these types of allowances paid to our ministers. Just look at the figures and bring in the suffering that Malawians are going through. How would the ministers feel the pain of the ordinary people?

“And seriously were those [fuel] reductions realistic? How far can we fool Malawians with these fake unrealistic reductions? This is unbelievable,” Kapito said.

When contacted on Tuesday to justify the entitlements in the wake of austerity measures, Minister of Finance Sosten Gwengwe referred us to Secretary to the President and Cabinet Colleen Zamba or government spokesperson, Minister of Information and Digitisation Gospel Kazako.

Kazako refused to comment on the matter, saying he was a beneficiary of the entitlements and would not therefore, give a fair comment.

When we met and asked Zamba on Wednesday at OPC conference room on the sidelines of a meeting she had with development partners and heads of missions to the country, she asked for a questionnaire.

But the questionnaire had already been sent to her on Wednesday morning.

She did not respond to the questionnaire as we went to bed.

When he presented the 2022-2023 national budget on February 18, 2022, Gwengwe announced that the government would put expenditure control measures for the year.

The measures included reviewing benefits and entitlements for senior government officials, including the Presidency and Cabinet Ministers; reviewing the Government Motor Vehicles policy with an aim of reducing expenditure in terms of number, types and sizes of motor vehicles; continuing with the installation of pre-paid utility meters in all government institutions without exception.

Other measures are procuring security equipment and fertilizer directly from manufacturers; recruiting competent graduates in accounting to fix challenges faced in processing of payment in IFMIS and Government Accounting; and fast tracking the digitization drive to reduce paperwork and fraud.

Chakwera announced 15 austerity measures for his government in the wake of the economic challenges the country is facing pushing the government to look at IMF as its last hope.

Some of the measures are a cut on foreign trips to three for government officials including himself for the remainder of the year; no top-up allowances for public officers on fully funded trips for work, training, workshops, or conferences and public officers traveling outside the country flying on economy class.

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