Malawi’s Minister of Finance, Ken Lipenga, on Friday presented the long awaited President Joyce Banda’s second national budget with a declaration that government will continue with its harsh reforms it undertook last year.
Lipenga stood with confidence in front of MPs in the Houses of Parliament saying the “key objective” of the government is to “restore macro-economic balance and adhere to principles of market-led economy.”
In the statement, the finance minister said total revenues and grants for the 2013/14 fiscal year were expected to amount to K603.4 billion (about $1.5bn) from K460.9 billion (about $1bn) and 36 percent above the revised K469 billion (about $1.1bn) plan in nominal terms.
The minister said of the total estimates, domestic revenues are projected at K363.1 billion, representing 60.0 percent of total revenue and grants while K240.3 billion will be donor grants, representing 40.0 percent.
Of the total domestic revenues, tax revenues are projected at K328.1 billion while the non-tax revenues are estimated at K35.0 billion with grants, on the other hand, expected to increase by 36 percent from K177. 4billion estimated for last fiscal year to K240.3 billion.
The minister also said total expenditure and net lending for the 2013/14 fiscal year are projected at K638.2 billion comprising K463.1 billion recurrent expenditure and K175.0 billion development expenditure.
On the overall fiscal deficit for the year, Lipenga said it was projected at K34.8 billion and will be wholly financed by foreign borrowing amounting to K42.0 billion.
“These resources will further be used to finance domestic debt repayment of K7.2 billion which is equivalent to 0.5 percent of GDP in line with the fiscal anchor of No Net Domestic Financing.
“This repayment of domestic debt will reduce the domestic debt stock from K170.6 billion at the end of 2012/13 financial year to K163.4 billion at the end of the 2013/14 financial year,” he explained.
In the budget, government, in line with its much-touted Economic Recovery Plan (ERP) and Malawi Growth Development Strategy (GDS II), has prioritized some key sectors vital for poverty reduction.
These include agriculture and food, security, social support and protection, education, health, transport, mining and energy.
The agriculture sector, which remains the main stay of Malawi’s economy and the education sector, have been allocated lion’s share with the agriculture about K60.1 going towards the purchase of subsidise fertilizer.
The education sector has been allocated a combined allocation of K99.19 billion representing 20 percent of the total budget which has been increased by about 24 percent from last year’s revised allocation of K80.0 billion.
Members of Parliament are expected to start scrutinizing vote by vote next week before the budget is considered for approval.Follow and Subscribe Nyasa TV :