Malawi cuts budget as revenues drop
LILONGWE – The Malawian government is cutting the 2018/19 financial year budget as the country has failed to collect enough revenue while some donors have yet to fulfill their funding commitments, Malawian Finance Minister Goodall Gondwe said.
Presenting the mid-year budget estimates Friday in the parliament in Lilongwe, Gondwe said, the government considered a disbursement of 82.3 million US dollars from the World Bank when it formulated the budget for the 2018/19 financial year which will end on June 30.
This disbursement is expected during the 2019-2020 fiscal year, which will start on July 1, and has forced his government to increase domestic borrowing and cut some expenditure to fill the gaps, he said.
Malawi's parliament usually meets in June every year to deliberate and approve a budget for the year to come. Gondwe said that the approved budget of 1.997 billion dollars for the 2018/19 fiscal year has been revised downwards to 1.962 billion dollars, while the approved estimate of revenue and grants at 1.715 billion dollars has also been revised downwards to 1.611 billion dollars.
"With these revisions, the approved net domestic borrowing has been revised upwards from 225.4 million United States dollars to 294.7 million United States dollars," the minister said in a statement. Gondwe also noted that the government has either reduced or removed from the budget a number of planned projects that cannot be implemented.
"Another thing is that we are asking ministry by ministry to manage their resources prudently," explained Gondwe, noting that his government hopes that it will manage to control expenditures by improving management.
Despite that, the minister said he is optimistic that Malawi's economy is on its way up, and it will be stable and eventually grow, citing the stable inflation and reduction in bank lending rates.
Malawi's parliament will start to review the mid-year budget estimates in a week beginning on Monday, which will be the last week of the parliament sitting before May 21 polls.