Malawi risks moving from fragile state to failed state -MP Chiphiko

Parliamentary Committee on Budget and Finance Chair Rhino Chiphiko has expressed worry over the underperformance of national budget half way it’s financial which they say it continues to make the life of average citizen unbearable.

Chiphiko made the remarks in his response to the mid-year budget statement made by minister of finance and economic planning Goodall Gondwe last Friday.

Gondwe announced a downward revision of the budget by K23.7 billion cut.

The 2015/16 approved budget was initially pegged at K929.7 billion, but is now down to K906 billion with recurrent budget reduced by just over K17.1 billion and the development budget slashed by K5.6 billion.

Chiphiko questioned the credibility of the initial budget figures and noted with concern how the total revenues and grants underperformed by K50 billion which is a shortfall of K13 billion to revenues while K36.5 billion was a shortfall in grants.

He said the committee has also noted the underperformance of domestic revenue both in tax revenues which under collected by K6 billion and non tax revenues which under collected by K7 billion.

Chiphiko told Parliament that his committee had three concerns due to such shortfalls which he wondered whether the ministry of finance has the technical capacity to model and forecast revenues or elements of the budget.

He said the committee is also wondering whether there are any penalties for poor performance or rewards for good performance when government impose revenue targets on Malawi Revenue Authority (MRA).

According to Chiphiko, it appears that the MRA staff has become demoralised in the recent past and this may be the cause for under collection of tax revenues.

The committee has since demanded answers from Gondwe on why Malawi only received K8 billion out of K33 billion that was programmed in project support representing a shortfall of K26 billion.

The committee also demands a list of projects that have been affected by the shortfall and an assurance that government is doing something to remedy the situation.

“Mr Speaker Sir, on the reduction in development expenditure, the committee wishes that the minister should indicate which protects will be shelved. Honourable Members of this august House should not give the executive a blank cheque, “he said.

Chiphoko said his committee noted with alarm that the single largest proposed reduction is in allocation for maize purchase by K3.8 billion.

“Given the expected shortfall in maize harvest in Machinga, Balaka , Zomba , Phalombe, Chiradzulu, Nsanje and Chikhwawa can the minister justify why we are cutting down this allocation ?”, queried Chiphiko

Chiphiko has also asked the minister to come and tell Parliament plans which he claim the executive has in area of monetary policy.

He said it’s not good for the minister to come into the House and claim that the executive has a plan and solutions but not table or share the same with the parliamentarians.

The committee has also wondered how interest rates can come down without any change in the stance of monetary policy.

He said the monetary policy the Malawi government has is wrong and very archaic, guiding the country in the wrong direction by throwing all set targets in disequilibrium and putting the country at crossroads.

Chiphiko has since warned that the country’s economy state is no longer fragile and if not well handled soon it will be a failed state.

He said Malawi needs a social safety net for the poorest; and decent jobs and conditions for all workers.

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