Treasury consults amid troubled 20/21 budget

Williams Banda

The Ministry of Finance has started soliciting views from stakeholders on formulation and composition of the next financial plan, expected to be presented to Parliament in June.

A statement published by the Treasury indicates that the consultations commenced on April 9 and are expected to run through to April 30, with virtual meetings slated from April 20 to 23.

This is coming at a time commentators have described implementation of the current budget as troubled, witnessed by the government’s failure to meet revenue projections resulting in excessive borrowing and a bloated debt burden.


For example, in the initial 2020/21 budget on one hand, total revenue and grants were projected at K1.435 trillion, with domestic revenues estimated at K1.179 trillion and K1.116 trillion coming from taxes. Grants were projected at K255.7 billion.

On the other hand, expenditure was projected at K2.190 trillion out of which K1.679 trillion was meant for recurrent expenses. The budget had a projected deficit of K754.8 billion.

However, at the end of the first half, total domestic revenue amounted to K564.2 billion. Tax contributions amounted to K548.7 billion.


During the same period, the government expenditure was over and above the target of K974.6 billion by 2.5 percent.

Presenting the Mid- Year Budget Statement, Minister of Finance Felix Mlusu said the developments will result in an upward revision of the expected net domestic borrowing requirement from K530.4 billion to K564.4 billion.

In a recent interview Lilongwe-based economist and a member of the Economics Association of Malawi (Ecama) Upile Matola said there has always a mismatch between plans and expenditures in the country in the recent past.

Matola, however, said poor revenue projections affect implementation of the budget.

“So, failure to accurately project revenue, which is based on other estimations, has a huge impact on public finance management” Matola said.

Another economist Donasius Pathera said such trends, coupled with volatility of the Kwacha, will result in subdued growth of the economy.

He said experts have provided necessary insights during budget formulation which the government neglects deliberately.

“Much advice has been given but I am not sure if the government is taking those pieces of advice seriously,” Pathera said.

But in an interview on Monday, Treasury Spokesperson Williams Banda dismissed the accusation, saying the government considers every input.

“We take on board advice that is provided during the consultation process and whatever input we will receive will be reflected in the 2021/22 budget.

“We understand the challenges that are there in implementing the current financial blueprint and that is why we are calling for input on how to improve the same,” Banda said.

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