Ministry of Finance, Economic Planning and Development has described the 2018/19 Financial Year as ‘a bit of a peculiar’ in terms of budget implementation.
The ministry’s spokesperson Davis Sado said this was so because the financial year coincided with one off payments which although planned, but implementation required extra resources to meet emerging demands.
“We had to finance the Tripartite Elections and in the course of implementation of the electoral calendar activities, some circles beyond control necessitated an increase in resources. We also had to respond to the effects of the Cyclone Idai which severely hit some parts of the country. Response for immediate needs and partial immediate reconstruction necessitated release of more resources to save the situation.
“Then we had a national census whose implementation necessitated some extra resources to cater for other implementation emerging issues. Further to that implementation of the budget was also affected as some MDAs had already committed themselves to some contracts in anticipation to some agreed projections but the projected inflows from revenue and other sources somehow was affected due to other factors,” he said.
Published Reserve Bank of Malawi (RBM) figures indicates that during the 2018/19 financial year, Treasury closed the year with a deficit of K189.3 billion against government’s projected K255 billion fiscal deficits for the just ended financial year
However, interest payment on loan, at K206.5 billion, was K24.9 billion more than the projected K181.6 billion for during the 2018/19 Mid-Year Budget Review.
According to RBM, in the second half of the financial year, government realised K497.3 billion in domestic revenue, against projected at K521.8 billion at mid-year.
Immediate past International Monetary Fund (IMF) resident representative Jack Ree said going forward, fiscal policy should focus more on domestic revenues as the budget needs to play more active roles in catalysing private sector-led growth—including good investments in infrastructures.
These goals, he said, require an upgrade of public finance management reform—away from the most basic layers of control like financial reporting and commitment control, to more sophisticated and complex ones like a single pipeline of scrutinised projects and ex-post reviews of key projects.