Malawiâ€™s Finance Minister Dr. Ken Lipenga has reaffirmed governmentâ€™s commitment towards maintaining fiscal discipline by adhering to the national budget stipulations.
â€œI have to say that we need to maintain strict measures and responsible fiscal behaviour. I have to point out that in all fairness, so far, in the first quarter [Julyâ€”September], the expenditure in the sectoral ministries has not been bad as we feared,â€ he said at the weekend on the sidelines of an annual conference by the Economics Association of Malawi (Ecama).
Lipenga was commenting on observations by most delegates to the conference who advised government to stay on course in its spending behaviour if the economy is to attain macroeconomic stability, among others.
One of the key discussants and former Finance Minister, Goodall Gondwe, stressed in his presentation that over the years, the Ministry of Finance has had challenges in executing its supervisory role over other sectoral ministries which, he said, resulted into the ministries overspending.
Lipenga, however, noted that there is an urgent need for Malawi to institutionalise expenditure controls, stressing that the ministry is mandated to enforce prudent spending behaviour among all sectoral ministries.
Committee to monitor ministries
He also hinted that soon government will officially announce a committee that will be monitoring the performance of all ministries as one of the measures to contain overspending.
â€œExpenditure controls need to be adhered to as determined by the budget without exceptions,â€ he added.
Lipenga observed that if government continues on the present path of fiscal consolidation as demonstrated in the first quarter, it is clear that the fiscal policy stance will be upheld by the end of the financial year.
Commenting on the general economic situation, he said all things being equal, he sees inflation rate easing to around 13 percent in 2013 and is confident that the current economic hardships â€˜will not be permanent.â€™
Government is aware of the need to tighten both fiscal and monetary policies for recent economic reforms to bear fruits, said the minister.
Regarding the downward of gross domestic product (GDP) growth from the initial 4.3 percent to 1.6 percent, Lipenga said the earlier figure was based on strong performance of tobacco and cotton sectors, but said that did not turn out the way government had anticipated.
â€œAnd because tobacco and agriculture, in general, are central to the economy, when you have slippages here and there, this has a tendency of pulling down growth,â€ explained Lipenga.