Malawi and Mauritius have been mentioned as two sub-Saharan Africa countries expected to have their fiscal deficits widen further in 2024.
This is contained in Africa’s Pulse, a latest publication by the World Bank, in an article titled ‘Tackling Inequalities to Revitalise Growth and Alleviate Poverty in Africa’.
The publication notes that fiscal performance across African countries is expected to be heterogeneous this year.
It says deficit widens in Malawi and Mauritius, Lesotho will move from surplus to deficit.
“Fiscal balances continue to improve across countries in the region, although sluggishly, due to measures that are raising revenues and reining in s p e n d i n g — i n c l u d i n g tax administration and compliance measures, tax reforms, streamlining of tax expenditures, subsidy reforms, and repurposing of public expenditures toward growth-enhancing programs.
“Amid the current external financing squeeze faced by African countries, some governments in the region are taking steps to put the accounts on a more sustainable path,” the publication reads.
This is coming at a time Malawi is implementing the 2024-25 national budget pegged at K5.9 trillion. The budget has a K1.43 trillion deficit.
In an interview, Economics Association of Malawi President Bertha Chikadza said already, the budget faces pressure from the effects of El Nino.
“The government will still resort to borrowing as the country has been experiencing a lot of economic problems.
“Automatically, the government will [also] be in an overdrive mode, spending more just to entice voters. So, obviously we expect a lot of spending from the government and that will widen the deficit,” Chikadza said
In an earlier interview, Secretary to Treasury Betchani Tchereni said the government succeeded in narrowing the budget deficit from K1.645 trillion in line with the set ambitious goal of addressing budget mismatches.
In 2011, Malawi attempted to implement a zero-deficit budget but it failed after the government was reported to resort to borrowing from local sources to finance the deficit.
Over the years, budget deficits have been widening.
