Malawi budget risk cuts with World  Bank withholding K60bn support

Malawians should  expect cuts in the K1.3 trillion 2019/19 financial plan because of the delay by  World Bank to disburse the budgetary support projected at K60 billion, the Finance, Economic Planning and Development Minister Goodall Gondwe has said.

He said the delaying releasing budget support commitments by donors will lead to adjustment to the National Budget and it has affected the implementation of the financial plan.

“We expected that we will receive K60 billion from thre World Bank, but that has been delayed which means we will have to reduce some expenditure,” said Gondwe.

The budget has two months to expire until a new financial plan is presented.

The government’s purse keeper said they have done “quit well” from June 30 2018 when budget was approved by parliament.

Gondwe said there has been positive macroeconomic situation prevailing in the country where the inflation has been slashed to single digits and exchange rate is stable.

He said with the delay to 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 Heakth, Education and Agriculture will not be affected by the anticipated cuts.

Gondwe to make cuts 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.

Gondwe is due to present a Mid-Year Budget Review Statement in Parliament this Friday afternoon – March  8 2019.

 

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