Treasury scrutinises councils’ bailout plea

Local councils in the country will have to wait a little longer before Treasury may release funds for their bailout package which they requested to cushion the economic impact that the Covid-19 pandemic is having on their operations.

Ministry of Finance, Economic Planning and Development spokesperson, Williams Banda, Wednesday said the councils made the financial assumptions as if the country was on lockdown hence the need to scrutinise their current activities and map the way forward

The councils asked for a bailout of K1.8 billion apparently because they can no longer cope with the financial gaps in their operations due to drop in revenue collection necessitated by the outbreak of the novel coronavirus.

Banda said the request came as a package and that the ministry is in talks with Malawi Local Government Association (Malga) to analyse their submissions.

“We are trying to analyse the assumptions that were put in place in their request as well as discuss with them on appropriate actions. We have seen that most of the markets are operating,” he said.

Banda added that the ministry is aware that the government has scaled down some of the operations and that councils have been affected too.

Malga Chief Executive Officer Charles Chunga said the councils will follow the government approach on the matter.

“When we were making the request, we had assumed that almost all councils are going to stop generating revenue but as we have noted, maybe there have been some relaxations in terms of measures and in such case, some councils are relatively better,” Chunga said.

In its request, Malga said most councils’ revenue has been reduced by 50 percent and that as such, they cannot implement other operations including paying salaries and wages for regular employees, among others.