Mockery to Malawi austerity talk: State House blows budget

Commentators and activists took to social media and internet discussion forum on Saturday to lash out at Malawi government’s austerity talk over a published report that  State House has blown its 2012/13 annual budget less than five months into the financial year even as priority sectors such as health struggle for funding.

The Weekend Nation on Staurday screamed with a headline ‘State House blows budget’ a  story which said by mid-November 2012, State House had spent K2.6 billion (about $7.9 million)—K800 million (about $2.4 million) more than its K1.8 billion annual allocation for the financial year ending June 2013.

The paper said it relied on sources—two from the Ministry of Finance and one from the National Audit Office (NAO)— who independently corroborated that the annual allocation for State Residences has been exhausted—they have spent K2.6 billion.

Kusakaza kwa chonchi, Economic Recovery ingayende!!!???(How can Economic Recover Plan work under this looting),”  human rights activist and member of the Civil and Political Space Platform, Billy Mayaya , posted on his Facebook timeline with the copy of the paper’s front page.

Lipenga: Minister of Finance is required to report all government expenditure to the National Assembly

Consumers Association of Malawi (Cama) executive director John Kapito, who has called for nation-wide protests against the rising cost of living and what he calls poor economic management, is qouted in the report saying: “This current abuse of resources has demonstrated that what the President says is totally different from what she does. She keeps on urging Malawians to go through the pains of the austerity measures but look at how she has behaved herself.”

Kapito wondered that if  President Banda’s office “cannot be prudent, what is happening in the other public offices?”

Outspoken political and social activist Ben Chiza Mkandawire also tweeted:“If there is one thing that disgusts me is a mind of anyone whose sole objective is ripping the poor and straining an already ailing economy like that of Malawi.”

The story dominated the debate on popural Nyasanet discussion forum where commentators notably Cuthbert Kachalae and Justice Dunstain Mwangulu went to town to nail the over-ependiture.

The newspaper reported that the latest Ministry of Finance quarterly budget performance report shows that government spent roughly three times more than what was approved as the travel budget for the period covering July-October 2012.

The report, posted on the ministry’s website, says its expenditure analysis was done by comparing expenditures in the first quarter of the 2011/12 fiscal year against those of this financial year because the figures had not changed in the 2012/13 fiscal year.

In the last quarter, internal travel budget was overspent by 82 percent; external travel jumped 262 percent whereas motor vehicle running expenses leaped 115 percent, the report shows.

According to the report, government spent K2.3 billion ($6.8 million) on internal travel in the first quarter of 2012/13 fiscal year against the planned K1.24 billion ($3.6 million), which is almost double the budget.

External travel budget jumped from a targeted K216 million ($635 000) to K782 million ($2.3 million), thrice the targeted amount whereas motor vehicle maintenance costs moved from K641 million ($218 000) to K1.4 billion ($4.1 million), twice the quartely budget.

The paper reported that this over-expenditure—set to be confirmed during the mid-year budget review meeting of Parliament scheduled for early 2013 when Finance Minister Dr. Ken Lipenga is expected to report back to the House—could be a mockery to the administration’s austerity talk and the few measures announced last week to curb spending.

“It also raises questions of where the administration’s priorities lie, given how key social sectors—health and education, for example—are not being adequately funded in the name of austerity that only seems to be applied selectively,” the paper reported.

Treasury’s spokesperson Nations Msowoya is quoted saying: “The Ministry of Finance is currently reviewing government budget performance for the last six months. This process is at an advanced stage. As required by the Public Finance Management Act of 2003, the Minister of Finance is required to report all government expenditure to the National Assembly at mid-year and at the end of the financial year.”.

Added Msowoya: “The mid-year budget review, which will be presented to Parliament, will give a comprehensive picture on government expenditure vote by vote. During that time, if it emerges that certain votes have overspent, government will seek appropriate Parliament approval.”

Presidential press secretary Steven Nhlane also said the issue of State Residences’ national budget allocation and other votes would be addressed by the Minister of Finance during the mid-year budget review.

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