Malawi’s Minister of Finance Goodall Gondwe has said the country is “ at its weakest” with huge arrears and lack of budgetary support.
Gondwe said this when he presented in parliament on Tuesday the 2014/15 zero-aid budget amounting to K729 billion which does not include budgetary support from donors .
The government purse keeper said the “corret conclusion” in the status of the nation is that it is “passing through turbulent times financially.”
Gondwe quoting President John F Kennedy of the US in his statement, said in such circumstances, the nation should adopt “a frugal stance where individuals or groups of individuals should desist from asking what more the government can do to improve their own situations.”
The Finance Minister in his budget statement titled ‘Restoration of Fiscal Discipline as a Foundation for Poverty Reduction’ pointed out that 50 years after independence, Malawi still need donor support.
He disclosed that government were still persuading the major development partners such as United States, European Union, United Kingdom, World Bank and African Development Bank among others to restore budgetary support.
Gondwe said the Peter Mutharika led government realizes that one of its most difficult problems inherited is the large accumulation of arrears.
He said repayment of arrears has already started and will continue more systematically on the approval of the budget.
“For the 2014/15 financial year, it has been decided that a payment of K50 billion will be madeand that the balance will be paid over a period to be agreed with the claimants,” he said.
He said 2014/15 budget assumes an average inflation rate of 15.6 percent and a possible GDP growth rate of 6.1 percent.
The government expects prudent monetary policies and higher farming production to push inflation lower to less than 15 percent and interest rates will also decline sharply.
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