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Budget comes under microscope

Richard Chimwendo banda

Colleen Zamba

Lawmakers start meeting in Lilongwe Monday for a period of four weeks when they will scrutinise the performance of the K2.84 trillion 2022-23 national budget passed in March this year, apart from performing other tasks.

A programme for the meeting indicates that Finance Minister Sosten Gwengwe is expected to present a statement on mid-year budget review on November 25.

The mid-year budget review comes as crucial budget assumptions made when presenting the budget, including those on the exchange rate and inflation, appear to be missed, throwing the future of the financial plan off-balance.

Among other things, the authorities did not anticipate the 25 percent devaluation of the Kwacha when they presented the budget in February this year.

In May this year, the Reserve Bank of Malawi (RBM) devalued the Kwacha by 25 percent, thereby making imported elements in the budget extremely expensive.

The budget had been crafted on the assumption of real gross domestic product (GDP) growth of 4.1 percent in 2022 and 4.0 percent in 2023.

However, recent indications have revealed that such a growth rate for 2022 is unattainable, with the International Monetary Fund pegging GDP growth for 2022 at 0.9 percent while RBM has projected that the economy would swell by 1.7 percent this year.

The budget had also assumed a policy rate of 12 percent but, in the past couple of months, Malawi has seen the monetary authorities hiking the policy rate twice, such that it now stands at 18 percent.

The budget had also assumed an average inflation rate of 9.1 percent during the fiscal year.

During the budget review, Malawians are also expected to see if, at all, the austerity measures put in place by Secretary to the President and Cabinet Colleen Zamba have yielded any tangible fruits.

Soon after assuming office, Zamba announced a number of austerity measures which included the ban on lakeshore meetings for civil servants.

Leader of the House Richard Chimwendo Banda said the meeting is also expected to tackle elections bills and six other bills.

“Then we have ministerial statements on critical issues such as the Affordable Inputs Programme, fuel availability, food availability and electricity,” Chimwendo Banda said.

According to the programme, the lawmakers are expected to deliberate on the mid-year budget review report up to December 9.

Parliament spokesperson Ian Mmwenye said in an interview Sunday that, apart from deliberating on bills, committee statements and ministerial statements, the meeting will handle questions to ministries for oral replies.

According to Mmwenye, the august House is expected to rise sine die on December 16.

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