Malawi weathering economic storm: Goodall set to reveal more budget cuts on Feb 17

The message coming from Finance and Economic Planning and Development Minister Goodall Gondwe is a stern warning that is weathering an economic storm and the financial future is uncertain  as he has said further reductions in budget expendiutre may be necessary in the second half o fthe 2016/17 financialyear.

The country’s purse keeper is set to present the 2016/17 Mid-Term Budget Statement to Parliament on Friday Feberuary 17, 2017.

Gondwe hints the storm clouds are clearly gathering in the country’s economy  and that government will scale down expenditure  to match with available resources.

“We will  undertake further reductions in spending because this country can only afford what it can afford and we will address that in the Budget, “ Gondwe told Nyasa Times.

He  said  only K23 billion grants out of the  expected K103 billion in the 2016/17 financial year went tinto the government purse by December 2016.

Gondwe said the country is facing more arrears as government issued interest free bonds.

“Now they are maturing and we will have ti replace them with interest bearing securities,” he said.

The Finance Minister said the public expenditure will still be affected with “fringe benefits” such as vehicles, and allowances in the civil service, the Malawi Electoral Commission.

“We must live within our means.  I’m absolutely clear we’ve got to look at those and streamline them,” he said.

Gondwe said he will make sure that the taxes of people are better spent, saying there is still poor fiscal discpline across the public services, a development which is working against the gains in the macro-economuc sector.

“We are optimistic things will work out well. We are begginingg to see some turnaround of the economy as industrial capacity has increased from 58 percent to 70 percent and we thing the exchange rate has stabilised a little, iflation is not rising as the season made us expect and the revenuews are responding well,” said Gondwe.

Malawi Congress Party (MCP) spokesperson on finance in Parliament, Alexander Kusamba Dzonzi,  said “tough action” is needed to balance the nation’s books and ease the burden on current and future taxpayers.

“The Budget is the right moment to set a path for the country to live within taxpayers’ means,” said Kusamba-Dzonzi, who is member of Parliament (MP) for Dowa West.

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