Mwanamvekha said the country's economic performance has been resilient despite experiencing challenges like climate change shocks and post election violent demonstrations. He said so far government has revised expenditure from the estimated 1.7 trillion to 1.84 trillion Malawi kwacha.
Said Mwanamvekha: “This country has attained and maintained macroeconomic stability characterised by low inflation, interest rates and stable exchange rate among other indicators. Consequently, Malawi has developed economic resilience such that the country is able to withstand external shocks. For instance, despite being hit by Tropical Cyclone Idai in March 2019, the economy remained stable and recorded a GDP growth rate of around 5.0 percent.
FRESH ELECTION FUNDING
Meanwhile the Finance Minister has told the house that a fresh election budget will depend on the outcome of the appeal case of the presidential election case. Among other things Mwanamvekha says it would be difficult to finance fresh election due to pressure in the budget.
“MEC has submitted a provisional budget amounting to K32.8 billion for the probable fresh presidential elections. However, the revised budget has provided K29.1 billion for that purpose. Government is still discussing with development partners for financing of the difference and possible run-off elections.
“House may wish to know that it will be extremely difficult for Government to finance this election due to the fiscal pressures that have been highlighted above. Should we not get positive response from the donors, Government will have no option but to either increase borrowing or drastically cut expenditure which will likely affect service delivery in all sectors,” he said
HIGHLIGHTS ON KEY EXPENDITURE CATEGORIES
Wages and Salaries
The provision for wages and salaries has been revised upwards from its approved amount of K443.4 billion to K465.7 billion. “As already highlighted, the increase is on account of higher than planned salary adjustment for civil servants,” explained Mwanamvekha.
“The provision for interest payment on debt has been maintained at the approved budget of K243.9 billion as its mid-year expenditure is in line with the expected levels to the end of the financial year”.
Goods and Services
“The provision for Goods and Services is being revised upwards from the approved amount of K296.8 billion to K345.9 billion,”
Farm Input Subsidy Program
“The provision for the Farm Inputs Subsidy Program has been maintained at K35.5 billion as no expenditure,”
According to Mwanamvekha, resources for maize purchase have been maintained at K10.0 billion of which K3.0 billion was spent during the first half. A total of K9.2 billion has been earmarked for maize purchase during the second half comprising K7.0 billion budget balance and K2.2 billion realised from ADMARC maize sales.
“These funds will be used to start early purchasing of maize from smallholder farmers,” he said.