Malawi’s revised budget up by K4.5 billion
Malawi’s Treasury has announced that the revised 2013/14 National Budget has gone up by K4.5 billion (about $11.2m) to K640.3 billion from the initially projected K635.8 billion.
Secretary to the Treasury Newby Kumwembe told the Budget and Finance Committee of Parliament in Lilongwe Wednesday that the rise has come against a background of government trimming by K32 billion funding to its ministries, departments and agencies meant for recurrent and development expenditure in the wake of the Capital Hill cash-gate.
Kumwembe appeared before the Budget and Finance Committee of Parliament in Lilongwe where he updated the committee on the impact of cash-gate on the implementation of the national budget. He attributed the increase in the overall budget, scheduled to be tabled in Parliament early next year during the Mid Term Budget Review meeting, to inclusion of interest payments accrued on arrears.
“The interest payments were underestimated by over K50 billion and have since been adjusted to K88 billion, which is about 14 percent of the budget,” he said.
Kumwembe explained that government has cut K15 billion and K17 billion on generic goods and services, and domestically-financed non-priority development projects.
He said on the other hand projected government revenue and grants have been increased by K12.9 billion from K563.7 billion to K576.6 billion with the estimate of locally-sourced revenues shooting from K355.7 billion to K429.2 billion.
“This is on account of improved revenue performance while expected grants have been reduced by K60.8 billion from K208 billion to K147.4 billion due to delayed disbursement of budgetary support,” said Kumwembe.
He also told the committee that in light of deteriorating fiscal performance in the first quarter of this financial year government has adopted measures aimed at closing the fiscal gap.
“The measures include Malawi Revenue Authority (MRA) improving performance on tax collection; and intensification of collection of dividends from profit-making public institutions,” said Kumwembe.
In the wake of the cash-gate scandal the country’s donors under the Common Approach to Budget Support (Cabs) suspended their budgetary support until Malawi improves financial management and put clear measures to deal with the scam and recover some of the plundered resources.
The donors advised Malawi to revise the national budget to reflect the absence of donor funds.
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