MPs back to Parliament


After presentation of the mid-year budget statement on Friday, Members of Parliament will today be back at Parliament Building where they will have a chance to contribute to the debate on how best to solve economic challenges facing the country.

A mid-year budget statement presented by Finance, Economic Planning and Development Minister, Goodall Gondwe, indicates that expenditure continues to outweigh revenue, meaning that the government has a penchant for over-spending.

Among other things, Gondwe indicated that the Malawi Revenue Authority continued to under-collect. For example, in the period under review, the tax-collecting body under-collected by K38.1 billion, under-collecting non-tax revenue by K7.8 billion, culminating in a total under-collection of K45.9 billion since July 2017.


However, under-collection of taxes is not the only problem dampening the country’s economic prospects, as Gondwe indicated that Malawi’s fiscal crisis has in the past six months been compounded by the government’s decision to bail out State-owned Agricultural Development and Marketing Corporation (Admarc) with K45.2 billion which it owed commercial banks.

On Wednesday last week, the International Monetary Fund (IMF) cited the Admarc bailout as one of the issues that exerted pressure on the national budget in the 2017/18 fiscal year.

Briefing journalists on the just ended Article IV Consultations and Negotiations on the next Extended Credit Facility Programme on Wednesday, IMF Mission Chief to Malawi, Pritha Mitra, pointed at expenditure over-runs and revenue shortfalls as some of the factors pulling Malawi’s economy backwards.


She, however, expressed hope that government officials would seal the economic loopholes.

“The authorities will deploy strong remedial measures to address the widening of the budget in the current fiscal year and shift to a slightly positive primary balance in the next fiscal year. It is committed to irrevocably closing out the arrears’ clearance programme. The government will continue enhancing transparency in the budget process, strengthening the medium-term budgetary framework and cash management and routinising bank reconciliation,” Pritha said.

And, as per tradition, these are some of the observations that will be sent to the IMF Executive Board for it to make a decision on plausibility of a new economic programme for Malawi.

The board is on course to meeting in April this year, when it will decide on whether Malawi deserves a new programme.

But, before the April Executive Board meeting, Malawi has a mammoth task at hand, considering that institutions such as the Malawi Police Service and Malawi Defence Force continue to overspend.

For instance, in the past six months, the two institutions registered an unbudgeted for K5 billion wage expenditure.

Such expenditures have forced the government to cut down on things such as fuel allowances. Gondwe told Parliament on Friday that Capital Hill would implement a reduction of between 10 and 20 percent of fuel allowances across the board.

He further indicated that the budget has slightly been reduced by K9.3 billion [or 0.7 percent of Gross Domestic Product] from the previous ceiling of K1, 297.2 trillion.

But it is not all doom as the government expects total revenues and grants to increase by K2.6 billion, from K1, 127.7 billion to K1, 130.3 billion.

So, as Parliament meets today, Members of Parliament have a chance to add their voice to issues of national interest.

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