Govt proposes downward adjustment on 2015/16 budget to K906bn

Written by  Isaak Jali

Minister of Finance, Economic Planning and Development Goodall Gondwe has proposed a downward adjustment of the 2015/16 national budget from K929.7 Billion to K906 Billion.

29
February

Presenting the mid-term budget review statement in Parliament Goodall Gondwe said the country's economy is still passing through turbulent times among other factors, due to the high interest and inflation rates.

 

 Gondwe said the reduction is necessitated by the fact that total revenue and grants that were targeted at K386 Billion at the end of the first half of 2015/16 financial year have been under collected by K50.8 Billion.

 

"Domestic revenues that were targeted at K312 Billion fell short of this amount by K12.7 Billion down to K299 Billion," Said Gondwe.

 

He further said in parallel, grants performed even worse where the target of K75.3 Billion was under performed by K36.5 Billion less than the targeted amount.

 

"I would like to underscore that in our view, although bilateral donors only withdrew budgetary support, disbursement of other types of grants is diminishing also." bemoaned Gondwe.

 

He said as such there is need for Malawi to strengthen efforts in raising domestic revenue s and to downplay all donor grants in general and only expect to focus on development loans from donors as a reliable mode of donor aid delivery.

 

“In short, we have to invigorate policies that aim at becoming progressively more self-sufficient in budgetary matters than has been the case so far." Explained Gondwe.

He therefore called on MPs to lead the effort to attain self-sufficiency by deflecting public attitudes that regard foreign aid as a permanent feature of our budget.

 

In response to the situation, Gondwe said government for its part will among others will withhold its intention to fill vacancies. He also said discussions will ensue with Department of Resource and Administration for proposals to reduce the bloated civil service.

 

"In order to reduce the amount of ORT, the cabinet his decided that the Treasury and the Office of the President and Cabinet should review perks including travel, vehicle and fuel entitlements that could be scaled down." Gondwe said.

 

He therefore warned various Ministries and Departments that their funding will not be against the original approved budgetary allocations but against the revised allocations.

Gondwe further said for the coming year it is expected that government will introduce a more inclusive tax system that could increase the tax revenues.

 

To sum it all, Gondwe assured the House and the nation that government is doing all it can to create a stable macroeconomic environment that will provide economic growth for job creation thereby leading to discernible poverty reduction in Malawi.

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