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Public finance management reforms still under scrutiny

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Stakeholders feel strides towards improving the country’s public finance management system, under the recently adopted public sector reforms have been slower than anticipated due to capacity challenges.

This comes after Finance Minister, Goodall Gondwe, in his 2016/17 Mid-Term Budget statement reaffirmed government’s commitment towards improved budget management.

Gondwe said treasury would continue with budgetary adjustments in the coming months, to bring about necessary balance between revenue and expenditure to minimise domestic borrowing.

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The first half of this financial year, government’s budgetary expenditure showed a slowdown in coming, particularly as regards to expenditure on development account.

Total expenditure amounted to K506.1 billion against a target of K586.2 billion, spending within the target of 17 percent.

Recurrent expenditure amounted to K415 billion against a target of K442.0 billion.

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However, wages, salaries and interest payment were overspent by 7.4 percent and 4.6 percent, respectively.

In an earlier interview, International Monitory Fund (IMF) Resident Representative to Malawi, Jack Ree, observed that the progress towards improved public finance management has been somewhat slower than anticipated.

He attributed this to capacity challenges which were “also graver.”

Since 2013, public finance management reform has been the core focus of the IMF programme in Malawi.

“During the last six months, however, we have seen a significant acceleration of the speed of the reform—which is positive.

“That said, I will not prejudge the status of the public finance management reform, which will be soon be assessed by our public finance experts,” said Ree.

In its recent presentation to parliamentary budget and finance committee, economic think-tank, Malawi Economic Justice Network (Mejn) estimated that 30 percent of funds in the national budget go down the drain due to fraud and corruption.

Mejn faults lack of adequate financial and technical support to relevant government departments for the vice.

All Malawi’s major development partners under the disbanded Common Approach to Budget Support (Cabs) suspended direct aid due to poor public finance management.

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