The Budget and Finance Committee of Parliament has called for transparency in how Treasury comes up with budget figures, saying the 2019/20 K1.7 trillion fiscal plan’s assumptions remain unrealistic and fall short of meeting the revenue targets.
The committee’s assertions come against the backdrop of figures showing that in the first five months of this fiscal year, Treasury has recorded a cumulative deficit of K131.8 billion.
In an interview yesterday, committee chairperson Sosten Gwengwe said the huge deficit in the budget indicates that Treasury presented unrealistic figures that would be difficult to achieve.
He said the committee observed that Treasury’s ambition to raise 40 percent revenue more than that of the 2018/19 fiscal year was unrealistic; hence, calling for a review of the projected figures when Parliament meets from February 10 to 28 for the Mid-Year Budget Review meeting.
Gwengwe said that they will be keen to check expectation targets in ministries, departments and agencies (MDAs) to understand how deficits affected operations and make recommendations on the way forward.
He said: “When we were passing the budget, we made it clear that the budget was over-ambitious, but we were dismissed outright by Treasury.
“Our demand from government is to be transparent with the committee, work closely with the committee because all we want in the end is to help Malawians live a decent life.”
Gwengwe said the committee will meet to focus on MDAs performance and what is contained in their expenditure within what Parliament approved.
Ministrry of Finance, Economic Planning and Development spokesperson Davies Sado could not be reached for a comment yesterday, but last week he admitted that Treasury was challenged with budget deficits due to a slow-down in business, which is affecting revenue collection, resulting into budget deficits.
“As Treasury, we have been cautious and conservative with our expenditure because we have to spend what we have collected and what is available in the national basket. But what has to be understood is that some of the expenditures we have to make are statutory in nature such as salaries and pensions”.
University of Malawi’s Chancellor College economics professor Ben Kaluwa yesterday said the committee has a point.
“Treasury needed to understand that if you are not realistic then you can’t achieve your wish list,” he said.
In his budget statement, Minister of Finance, Economic Planning and Development Joseph Mwanamvekha indicated that overall deficit for 2019/20 fiscal year is estimated at K155.9 billion, representing 2.5 percent of gross domestic product (GDP). The projection represents a reduction of about 51.3 percent from the 2018/19 preliminary actual budget deficit of K320 billion.