The government’s budgetary operations posted a K21.6 billion surplus in January 2024, down from K28.9 billion recorded in the preceding month, Reserve Bank of Malawi (RBM) figures show.
The performance reflects an improvement from a deficit of K198.5 million recorded in January 2023.
According to RBM Monthly Economic Review, during the month under review, the central government’s total revenues through the central bank were recorded at K406.1 billion.
The government’s expenditures were recorded at K384.5 billion.
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Available figures show that total revenues increased by K44.1 billion (12.2 percent) to K406.1 billion in January 2024 from K362.0 billion in the previous month.
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According to the RBM report, the increase was driven by a K80.3 billion rise in tax revenues to K272.1 billion, while non-tax revenues and grants decreased by K2.0 billion (33.6 percent) and K34.2 billion (20.8 percent), respectively during the month under review.
On the other hand, the government expenditures increased by K51.3 billion (15.4 percent) in the month under review to K384.5 billion 2024 from K333.2 billion in the previous month.
This increase followed a K59.7 billion (22.5 percent) rise in recurrent expenditures to K325.5 billion, which outweighed the decline by K8.4 billion (12.4 percent) in development expenditures to K59.0 billion during the period under review.
According to figures in the 2023-24 national budget presented to parliament some weeks ago by Finance Minister Simplex Chithyola Banda, based on preliminary outturn of revenue and expenditure the overall deficit is estimated at K1.36 trillion.
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The deficit is being financed through domestic borrowing, amounting to K1.23 trillion, while the rest of the resources will come from foreign borrowing.
Total revenue, including grants, is estimated to close the year at K2.99 trillion. Domestic revenue is expected to reach K2.41 trillion, of which tax revenue is estimated at K2.20 trillion, and K209.34 billion is other revenue.
According to Chithyola Banda, to address the government’s spending needs, the government is committed to improving domestic revenue mobilisation.
“To reduce this fiscal imbalance, the government will continue to adjust its budgetary operations by enhancing domestic revenue mobilization and rationalising expenditures with a focus on highly productive sectors,” Chithyola Banda said.
The 2024-25 budget is pegged at K5.9 trillion with a projected deficit of K1.43 trillion, representing 7.6 percent of the gross domestic product and 23.91 percent of total expenditures.
In its analysis, private sector players umbrella body, the Malawi Confederation of Chambers of Commerce and Industry says this would push the up public debt levels now seen at K12.56 trillion.
“The recurrent expenditure should be within budget levels and improve planning and execution on the development budget.
“Doing this would have positive spill-over effects on growth and translate to an improved domestic revenue and resource envelope,” reads the statement.
