Malawi risks moving from fragile state to failed state -MP Chiphiko

Parliamentary Committee on Budget and Finance Chair Rhino Chiphiko has expressed worry over the underperformance of national budget half way it’s financial which they say it continues to make the life of average citizen unbearable.

Chiphiko: Credibility of the budget is damaged

Chiphiko: Credibility of the budget is damaged

Chiphiko made the remarks in his response to the mid-year budget statement made by minister of finance and economic planning Goodall Gondwe last Friday.

Gondwe announced a downward revision of the budget by K23.7 billion cut.

The 2015/16 approved budget was initially pegged at K929.7 billion, but is now down to K906 billion with recurrent budget reduced by just over K17.1 billion and the development budget slashed by K5.6 billion.

Chiphiko questioned the credibility of the initial budget figures and noted with concern how the total revenues and grants underperformed by K50 billion which is a shortfall of K13 billion to revenues while K36.5 billion was a shortfall in grants.

He said the committee has also noted the underperformance of domestic revenue both in tax revenues which under collected by K6 billion and non tax revenues which under collected by K7 billion.

Chiphiko told Parliament that his committee had three concerns due to such shortfalls which he wondered whether the ministry of finance has the technical capacity to model and forecast revenues or elements of the budget.

He said the committee is also wondering whether there are any penalties for poor performance or rewards for good performance when government impose revenue targets on Malawi Revenue Authority (MRA).

According to Chiphiko, it appears that the MRA staff has become demoralised in the recent past and this may be the cause for under collection of tax revenues.

The committee has since demanded answers from Gondwe on why Malawi only received K8 billion out of K33 billion that was programmed in project support representing a shortfall of K26 billion.

The committee also demands a list of projects that have been affected by the shortfall and an assurance that government is doing something to remedy the situation.

“Mr Speaker Sir, on the reduction in development expenditure, the committee wishes that the minister should indicate which protects will be shelved. Honourable Members of this august House should not give the executive a blank cheque, “he said.

Chiphoko said his committee noted with alarm that the single largest proposed reduction is in allocation for maize purchase by K3.8 billion.

“Given the expected shortfall in maize harvest in Machinga, Balaka , Zomba , Phalombe, Chiradzulu, Nsanje and Chikhwawa can the minister justify why we are cutting down this allocation ?”, queried Chiphiko

Chiphiko has also asked the minister to come and tell Parliament plans which he claim the executive has in area of monetary policy.

He said it’s not good for the minister to come into the House and claim that the executive has a plan and solutions but not table or share the same with the parliamentarians.

The committee has also wondered how interest rates can come down without any change in the stance of monetary policy.

He said the monetary policy the Malawi government has is wrong and very archaic, guiding the country in the wrong direction by throwing all set targets in disequilibrium and putting the country at crossroads.

Chiphiko has since warned that the country’s economy state is no longer fragile and if not well handled soon it will be a failed state.

He said Malawi needs a social safety net for the poorest; and decent jobs and conditions for all workers.

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8 thoughts on “Malawi risks moving from fragile state to failed state -MP Chiphiko”

  1. USACitizen says:

    A FAILED STATE… Period!

    MALAWI HAS BEEN ON THE FAILED STATE INDEX FOR OVER 50 YEARS

    THE ONLY THING THAT CAN CHANGE MALAWI IS COLONIZATION FOR
    100 YEARS

  2. Concerned citizen says:

    If this is a failed state, then all of us citizens should admit we are all failures.

  3. Tt says:

    THIS IS FAILED STATE, PERIOD!!!!!! Admit it you bunch of god fearing morons

  4. I have problems with Chiphiko in this news item. I thought the PCBF under Chiphiko should have explained to Malawians efforts it is undertaking to address the problems he is outlining here. I cannot go any further because I do not see the mandate of the Committee which I suppose is to advise government on issues Chiphiko is raising here and therefore be able to report to Parliament what PCBF has done to address the situation other condemning govt in this way.

  5. The Analyst says:

    O………………………………………………………………………………………………………………………………………………………………………………………………………………………..O
    A Paradox that is Malawi Economy

    The ultimate goal of running a country or an economy is to improve people’s standards of living through sustained economic growth (job creation e.t.c).
    . . . We want the economy to grow but have kept interest rates high hence denying the private sector to borrow for investment hence job creation – contradictory!

    . . . Maybe the high interest rates are meant to curb inflation growth, but is Malawi’s inflation any low now as interest rates have consistently been kept high? Does this not tell us that we are using wrong policies or are mis-targetting?
    . . . What economic or financial theory can explain high interest rates and high inflation – Contradiction! What economics or finance books are we peeple reading?
    ………………………………………………………………………………………………………………………………………………………………………………………………………………………….
    Does an economy grow sustaibaly faster by increasing interest rates hence reducing private sector investment (and reducing a country’s inflation) OR by reducing interest rates hence increasing private sector investment (increasing inflation)?
    . . . Nobody has cared to embark on such a research, yet Malawi continues to implement trial-and-error policies; even when its clear that such policies are moving this country miles and miles to nowhere?

    Malawi is such a paradox of an economy. And those driving it are equally paradoxical in their Neanderthal mentality and manners.
    O……………………………………………………………………………………………………………………………………………………………………………………………………………………O

  6. kamoto Ralph says:

    Too much nepotism at MRA. What matters is tribe not professional acumen when it comes to recruitment and promotions. So bwana chiphiko you are very right. We non lhomwes at MRA are very much demoralized. Promotions and recruitment is favouring Alhomwe in paŕticular and anthu aku south kuno in general.

    Ma batman azimenezi ndi achina George Mankhwala. Perfect tribalist. We can’t all belong to lhomwes. Mxiiiii.

  7. Kaziulika Chimugonda says:

    Looting is free for all. MRA is playing the same game. When MRA is told not collect tax and duty from Indian Gani for his Merc and Indian Mapeto. What does MRA do when collecting tax and duty? Do the same! It is not lack of incetive, No, like father like son.

  8. Kalyoto says:

    Talking stupid in parliament just to make news, where did you get experience of running a country? Now that you have made a marriage of inconvenience with Nyasatimes every stupid alteration you make is posted simply you are mcp. What kind of journalism is this, mercenaries or what?

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