20 February 2018

Malawi: Chiphiko Raps Goodall's 'Wish List' in Mid-Term Budget

Minister of Finance, Economic Planning and Development Goodall Gondwe's Mid-term Budget Review Statement faced scrutiny from Parliamentary Budget and Finance Committee which has called it mere wish list as the country's fiscal position is under pressure from a weakening domestic revenue collection and high interest rates on Admarc loans.

Gondwe announced a downward adjustment of the financial plan with the travel budget suffering cuts through travel policy changes.

Budget and Finance Committee of Parliament chairperson Rhino Chiphiko slammed the mediocre K9.3 billion revision to the budget.

He wondered why the country's purse-keeper included a pledge of donors into the fiscal plan before completing discussions.

Gondwe is banking on expected lifeline from European Union (EU) and a promised K60 billion budgetary support from the World Bank to rescue the 2017/18 budget from disaster following a K45 billion bailout to State produce trader Agricultural Development and Marketing Corporation (Admarc) and a K46 billion shortfall in domestic revenue collection piling pressure on the budget.

But Chiphiko said discussions with the cooperating partners had not yet been finalised on the budgetary support.

"This makes a mockery of the whole budget which basically translate into a wish list," Chiphikho said.

Chiphiko also described the Mid-term Budget Review Statement as lacking detail., demanding Gondwe to explain "why there was under-performance of dedicated grants projected at K24.4 billion and we only got K11.4 billion at mid-year."

Gondwe has been widely criticised for not being accountable enough on government's over expenditure.

He said a K55 billion budget support that Treasury expected from EU has not come to pass.

Gondwe conceded the figure was put in too hastily before the government and the EU had finalised discussing the conditionalities.

The minister is also having to deal with the miscalculation that happened in 2015/16 when the government guaranteed K23 billion in commercial bank loans to allow Admarc to purchase maize at the time when an estimated six million people were facing food shortages.

The government, and Admarc, had anticipated that the purchased maize would be sold to recoup the payments and interest on the bank loans but the widespread availability of humanitarian food through donors resulted in Admarc maize remaining in the warehouses.


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