For a long time, Ministry of Finance, Economic Planning and Development has preached about expenditure cuts/controls as one way of walking the talk on austerity measures.
Incumbent Minister of Finance, Economic Planning and Development Goodall Gondwe is no exception as last September, barely three months into the implementation of the K1.2 trillion 2016/17 National Budget, he announced that government would trim expenditure by a third.
Gondwe’s bold decision (or is it wish?) was premised on the fact that the available resources were not enough to enable Treasury to implement the budget as planned. With development partners continuing to hold on to their estimated 40 percent funds in direct budget support due to concerns of loopholes in the Public Finance Management (PFM) system since October 2013, the going has not been easy for Gondwe and his team.
Granted, domestic revenue collections—both tax and non-tax revenues—have shown positive strides, beating set targets during the first half of the fiscal year covering July to December 2016. However, Treasury has a myriad of problems to overcome, including maturing arrears.
The 2016/17 National Budget is based on four priorities that seek to increase domestic resources mobilisation, purchasing food, maintaining the wage bill at below seven percent and committing to ensure predictability in key social sectors of health and education.
From the look of things, Gondwe lacks the starting point for his expenditure cuts. He is on record as having said no sector would be spared.
However, critics of government expenditure have called for across-the-board expenditure cuts to reflect the seriousness of the drive. The critics argue that if the expenditure cut talk is to be taken seriously, the drive should start from the President and his Cabinet through Principal Secretaries (PSs) to the ground.
I cannot agree more. It does not make sense to trim expenditure to a health centre at Euthini in Mzimba or Namadidi in Zomba while leaving a Cabinet minister to continue drawing an equivalent of 1 000 litres worth of fuel per month or indeed letting PSs and members of Parliament (MPs) take home at least 500 litres of fuel per month. The irony is that whereas these individual public officers get their fuel entitlements come rain or sunshine, many district health offices have grounded their ambulances for lack of fuel or routine maintenance funds. If this is not hypocrisy, what is?
Strong political will and not mere lip service will demonstrate Treasury’s seriousness to implement the expenditure cuts wish unveiled in September 2016. Before Malawians can be asked to tighten their belts, the President, Cabinet ministers and MPs should lead by example.
Malawian MPs have been known to be united when bargaining for their perks. Before Gondwe presents his 2016/17 Mid-Term Budget Statement on February 17, the legislators could ease the minister’s headache on where to cut expenditure by agreeing to have their monthly fuel allocation trimmed by, say, half. Some may argue that the savings may not be enough, but what is enough? Such a gesture could provide Treasury about K40 million monthly to be allocated to financially deprived sectors.
We have heard the expenditure cut song for far too long. What we want to see now is action, action and more action demonstrated through radical cuts in luxurious expenses in the public sector.
That way, when Treasury urges Malawians to cut the cloth according to their size, surely, everyone will willingly do the needful as the country paces towards achieving macro-economic stability. When that stability is achieved, Malawians will clap hands for Gondwe and his team for a job well done.