Minister of Finance, Economic Planning and Development Joseph Mwanamvekha has said Malawi was on track to remain within the terms of the International Monetary Fund (IMF) Extended Credit Facility (ECF) program.
Minister Msaka congratulates Mwanamvekha after delivering the national budget-pic by Lisa Kadango
An IMF mission team arriving on September 10 for the second and third review will unlock the remainder of about $56 million of the loan, Mwanamveka told Parliament on Monday when he delivered the 2019/20 Malawi budget pegged at K1.7 trillion.
He said government has been committed to working around meeting the IMF requirements and is hopeful that the outcome of the review will be positive.
He said IMF's program aims at entrenching macroeconomic stability and fostering higher, more resilient and inclusive growth.
Mwanamvekha said IMF program is "so far on track and government is committed to ensure that it remains on this path."
The Finance minister said upon the successful conclusion of the second and third reviews, the IMF has already decided to provide more financial resources to Malawi through "augmentation as a response to the devastation caused by Tropical Cyclone Idai that hit the country sometime in March 2019."
Mwanamvekha conceded that government is facing challenges in the areas of fiscal deficits and public debt.
He however said with the policies and the President Peter Mutharika administration has put in place, it is envisaged that debt will soon be declining in the medium to long term.
"Government will endeavour to borrow in a prudent manner to ensure debt sustainability for the current and future generations," said Mwanamvekha.
He said external borrowing will be contracted with "careful consideration to ensure realization of value for money."
Mwanamvekha said government plant sot reduce domestic borrowing from K264.6billion tin 2018/19 fiscal year to K45.9 billion in 2019/20 fiscal year.
He said Treasury is reviewing the terms and conditions of borrowing of all external creditors "to ensure that government borrowing is on concessional terms and for projects with high economic returns."
Mwanamvekha also disclosed that government will finalise the review of the Public Finance Management Act (2003) to enhance transparency and accountability in the management if public resources.
"Through this review, Treasury will enhance enforcement of sanctions and hold public officers accountable in order to eliminate the laissez faire attitude in the public service," he said.
Mwanamvekha said committing of government resources by controlling officers without the knowledge of Treasury will no longer be allowed.
Furthermore, Mwanamvekha said Treasury will sanction any controlling officer who create arrears and default on outstanding payments.
"These include those who accumulate arrears on utilities, contributions to Saccos, tax remittance to MRA and pension contributions," he said.
He said all contracts with financial implications will require vetting by Treasury before approval of the same by the Public Procurement and Disposal of Assets Authority.
The minister said this will be done in a manner that will not add unnecessary delays.