Government overspends by K477 billion in 2022
The government overspent by K477.44 billion in the 2022-23 national budget, which ended on March 21, The Daily Times has established.
Last fiscal year, Parliament approved a total budget of K2.84 trillion, with total expenditure in the financial year amounting to K3.317 trillion, representing a jump of K477.44 billion.
On Wednesday, Finance Minister Sosten Gwengwe presented Bill Number 8 of 2023, Supplementary Appropriation Bill, to regularise the over expenditure.
Topping the list of budget lines that overspent is statutory obligations, comprising pensions and gratuities, as well as public debt charges, which overspent by K126.459 billion.
Second on the list is the National Local Government Finance Committee, which overspent by K85.087 billion, followed by the Ministry of Energy with an over-expenditure of K54.745 billion.
The Ministry of Agriculture is fourth on the list, with an over-expenditure of K51.85 billion, followed by the Ministry of Education, which spent an additional K49.904 billion above its budget allocation.
The Ministry of Lands spent an additional K30.8 billion, the Ministry of Finance overspent by K23.949 billion while the Ministry of Transport spent an additional K20.151 billion above its budget.
Other institutions that spent above their budgets included subvented organisations, the Malawi Defence Force, Ministry of Information, Malawi Police Service, Ministry of Labour, Ministry of Homeland Security, Ministry of Foreign Affairs, the Department of Immigration and a number of local councils.
Commenting on the development, Budget and Finance Committee of Parliament Chairperson Gladys Ganda said while the committee appreciates that the country faced a lot of crises such as 25 percent devaluation of the Kwacha, cholera outbreak and Tropical Cyclone Freddy, the over-expenditure is still on the higher side.
Ganda said the budget had already been increased during the midyear review to cushion ministries, departments and agencies from the impact of devaluation
“Moving forward, there is a need for government to respect the budget once approved by Parliament. Government needs to control its appetite for overspending as it attracts more borrowing.
“Due to limited resources that the country has, it therefore means that any over-expenditure translates to more unapproved borrowing. Fiscal prudence should apply to all MDAs,” Ganda said.
She added that there is also a need to review the Public Finance Management Act (PFMA) and tighten budget spending by government.
“Quarterly monitoring meetings and adherence to provisions of the Public Finance Management Act should be enhanced. Review of extra budgetary financing on quarterly basis is also critical to address such problems,” Ganda said.
Asked to justify the additional spending Monday, NLGFC Executive Director Kondwani Santhe said, in the first place, his organisation’s capital budget was revised downwards from K65.3 billion to K25.2 billion at midyear, which was not supposed to be the case.
“Further, Parliament approved Social Support for Resilient Livelihoods Project additional financing (funded by the World Bank), of which disbursements started in January 2023 after approval of the midyear budget, hence the actual expenditure being at K141.5 billion.
“The resources were used for increased enrolment of beneficiaries for the additional funds under Climate Smart Enhanced Public Works Programme (CS-EPWP) and social cash transfers,” Santhe said.
Meanwhile, financial accountability advocate Willy Kambwandira has said whatever the reasons for overspending are, the trend is worrisome and should only be explained through an audit or investigation.
“Sadly this has become a trend now and no one is held accountable. This is clear squandering of public funds because you will see that a substantial amount of the funds went to travel, allowances and other extravagances. If anything, it only confirms our fears that our budget is coined on unrealistic assumptions.
“Again, over-expenditure is a result of lack of good governance and fiscal discipline, which are resulting into misallocation of resources and increasing costs of doing business,” Kambwandira said.