Goodall says budget risk cuts if World Bank withold K50bn support

Minister of Finance, Economic Planning and Development Goodall Gondwe has expressed the hope that the meeting with International Monetary Fund (IMF) will be fruitful and that would lead to World Bank and Europeam Union (EU)  to disburse the budgetary support projected at K50 billion , saying failure to release the money will trigger cuts in the K1.3 trillion financial plan.

Gondwe said the IMF would be interested to know  the performance of the reforms in particular structural conditionalitied some ministries were expected to meet in the period under review.

He also said the global lender will check “if there has been compliance of ruled and regulations such as bank reconciliations.”

The government’s purse keeper said they done “quit well” from June 30 2018.

However, Gondwe said Treasury have overspent  by a point three percent  of GDP (gross domestic product), which he said “is not much”.

Gondwe  said IMF would be pleased to note the positive macroeconomic situation prevailing  in the country where the inflation has been slashed to single digits and exchange rate is stabe.

‘The Finance Minister said if they will not get the budgetary support, Treasury will be forced to cut funding in other recurrent transaction or ORT of a number of ministries and departments.

However, he said the cuts will spare the Malawi Defence Force and the Police. Key ministries of Health, Education and Agriculture will not be affected by the anticipated cuts.

Gondwe said the cuts would be to the tune of K32 billion from the recurrent expenditure – about 3.4 percent of the budget.

He said government would also cut about K28 billion from  the development account to meet the K50 billion budget deficit in the absence of the anticipated support.