Advertisement
Business

Treasury deficit seen at K74.4 billion in April

Advertisement

Malawi government operations faced a K74.7 billion deficit in April as expenditure increased to K267.8 billion while revenue dropped to K193.10 billion compared to the preceding month of March 2022, a Reserve Bank of Malawi (RBM) report has indicated.

According to the RBM April 2022 Monthly Economic Review, government expenditures increased by K59.2 billion in April while revenue decreased by K26.6 billion.

The report notes that the increase in expenditure was on account of the rise in both recurrent and development expenditures while the decrease in total revenues was on account of a decline in domestic revenues and a drop in grants.

Advertisement

“Development expenditures increased by 5.2 percent (K2.0 billion) to K40.5 billion following a 16.4 percent (K4.1 billion) increment in local funding and a 16.2 percent (K2.1 billion) decrease in donor contributions in the period under review,” the report reads.

In response to such disparities and to control expenditure, government this month announced austerity measures which have since been implemented by the Secretary to the President and Cabinet Colleen Zamba.

The measures include a ban on lakeshore conferences, trimmed international trips by the President and Cabinet ministers, trimmed board meetings and a hold on some government procurements, among others.

Advertisement

Due to the measures, this month alone, government has saved approximately K268 million as President Lazarus Chakwera has cancelled two of his foreign trips.

Taxation expert Emmanuel Kaluluma said it is surprising that revenue dropped in April considering that it is a busy month because of the seasonality of the economy and its dependence on the agricultural marketing season.

Kaluluma applauded the government for the austerity measures which are now in place and expressed hope that, if followed to the core, they will help it cut expenditure and reduce the deficit.

“The private sector should however help government by increasing salaries of those below the K100, 000 thresholds so that they are also taxable throw PAYE and improve government revenue,” he said.

Advertisement
Tags
Show More
Advertisement

Related Articles

Back to top button
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker