Malawi Kwacha rate to US dollar to be maintained at K750 – Mwanamvekha

The new Minister of Finance, Economic Planning and Development Joseph Mwanamvekha has said the  exchange rate is expected to average K750 to the dollar and that government will reduce domestic borrowing from 4.1 percent of GDP to 0.3 percent between July and October 2019.

Mwanamvekha  said this when he tabled  the K511.3 billion provisional budget in Parliament on Friday.

The Finance Minister told the House that inflation rate is also expected to average eight percent during this period under, adding that only ongoing projects will be provided for in the provisional budget.

“Provisions for new projects will be made in the main budget and all contractual obligations which fall due within the four months under consideration have been provided for,” said Mwanamvekha.

Some legislators doubted the average exchange of K750 to a dollar assumption, underpinning the provisional budget as well as the K50.7 billion grants that Treasury expects to receive from development partners during the period under review.

The provisional budget has revenue and grants amounting to K461.2 billion, of which K410.5 billion is domestic revenues and K50.7 billion are grants.77

But  Mwanamvekha said currently  the Unites States dollar buying rate is K760 while the selling rate is K770.

“We should be able to have an exchange rate of K750 soon and we are moving towards that. Tobacco dollars will help us stabilise. Already, $100 million (about K77 billion) has been realised from tobacco sales. The kwacha will soon remain stable,” said the minister.

In the budget, wages and salaries are projected at K135 billion, representing 34 percent of the 2018/2019 fiscal plan. Development expenditure has a total provision of K116.5 billion of which K98.7 billion is foreign financed while K17.9 billion is domestically financed.

The provisional budget motion was approved by the House.

Mwanamvekha presented the interim budget pursuant to Section 178 of the Constitution and after a resolution for the National Assembly to approve and authorise him to withdraw from the Consolidated Fund an amount not exceeding K511 269 522 794 for the purpose of meeting expenditure necessary to carry on services of government from July 1 2019 to October 31 2019.

The Finance Ministers expects to table the annual fiscal plan by September.

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