Treasury faulted on budget operations
There are mixed feelings on budget operations in the first half of the 2019/20 fiscal year as some commentators have faulted the Treasury for what they call lack of prudence.
This comes ahead of the mid-term budget review by Parliament.
For instance, a position paper released Thursday by the Employers Consultative Association of Malawi (Ecam) indicates that in the first five months, allocations to most government departments and ministries could not match budgeted amounts.
“Therefore, Ecam is of the considered view that the government should allocate more resources on key priority areas such the energy sector so that Malawi achieves inclusive and economic empowerment,” reads part of the paper issued yesterday.
This comes as the Treasury has been reportedly overspending on a monthly basis for a greater part of the period coupled with revenue underperformance.
Figures from the Reserve Bank of Malawi for instance show that the Treasury overspent by K41.7 billion in the second quarter of the 2019/20 financial year.
Total revenues amounted K315.2 billion (5.3 percent of GDP), comprising K279.6 billion domestic revenues and K27.7 billion grants.
Total expenditures in the quarter amounted K390.6 billion (6.6 percent of GDP) against a quarterly budget of K348.9 billion (5.9 percent of GDP).
Chairperson of the Budget and Finance Committee of Parliament, Sosten Gwengwe, said in an interview yesterday that the budget needed thorough scrutiny.
“We are yet to see the figures but it is our hope that the assumptions on revenue forecasts are still holding and that government ministries, departments and agencies are within budget,” Gwengwe said.
Ministry of Finance spokesperson, Davis Sado, said Treasury had worked hard to sticks to the budget framework in line with outlined assumptions.
“In some months revenues were affected due to a number of factors which resulted into a bit slow down in business hence, affecting some of the projections,” Sado said.
He said spending was based on ministries departments, agencies programmes and activities.
Sado said the treasury expects an improvement in revenue generation during the second half of the year.