From February 4 2022, members of Parliament (MPs) will reconvene in Lilongwe for the Budget Meeting which will give them town to scrutinise allocations in the 2022/23 fiscal year as worked out by the Ministry of Finance.
The new government fiscal year will roll out on April 1 2022 and end on March 31 2023, a departure from the previous July to June cycle.
The next budget will come amid implementation challenges of the current fiscal plan worsened by rising public debt stock and energy prices as well as a weakening kwacha and the economic impact of the Covid-19 pandemic.
Preliminary indications point to the 2021/22 national budget missing some assumptions on gross domestic product (GDP), inflation and exchange rates as well as domestic revenue which is the main source of funding amid budget support drought.
In the course of implementing the K1.9 trillion nine-month budget, Capital Hill found itself struggling to make ends meet as collected revenue was less than the expenditure, thereby creating fiscal deficits monthly.
Ministry of Finance projected an average inflation rate of 7.4 percent during the fiscal year and a stable exchange rate of about K780 per United States dollar. But the Reserve Bank of Malawi (RBM) revised upwards its 2021 annual average inflation rate to 9.1 percent from an earlier target of 8.9 percent. As if that was not enough, the continued depreciation of the local currency against other major global currencies posed a further headache to fiscal policy authorities at Capital Hill.
Given that there was no Mid-Year Budget Review Meeting to assess the 2021/22 National Budget, issues of transparency and accountability for public funds comes into play. It is my plea and expectation that MPs will do the needful in providing scrutiny to the phasing out budget to see how public funds extended through the Appropriation Bill have been used.
Budget scrutiny is an important exercise that needs not to be just glossed over. It is through budget allocations that public service delivery for good roads, well stocked hospitals and other social amenities can be made or broken.
In recent years, we have seen the tendency by authorities to make allocations that sound attractive on paper, but do not work in reality due to lack of funds.
This is not healthy and gives the public a raw deal. In Blantyre City, for instance, several road rehabilitation and improvement projects to improve traffic flow. However, two months to the end of the financial year there is nothing to show for except potholes and gullies at the proposed slip lanes at the junction of Kapeni and Mahatma Ghandi roads in Mount Pleasant.
MPs should take seriously proceedings of the Budget Meeting of Parliament as it is critical to delivery of development projects and improvement of the welfare of their constituents.
In the 2021/22 fiscal year, government mainly focused on implementing economic policies and programmes envisaged to put the country on track to attain the nation’s aspirations as prescribed in the Malawi 2063, the country’s long-term development strategy with periodic targets, President Lazarus Chakwera launched in January last year.
Through the budget, government insisted on entrenching macroeconomic stability and enhancing resilience to external shocks while also fast-tracking economic recovery during the post Covid-19 pandemic period.
Most likely, the objectives laid out in the present budget will be carried forward in the next fiscal plan. The economy needs stimulation after being rattled by Covid-19 impact.
But it appears it never rains, but pours for Malawi as the impact of the Tropical Cyclone Ana that hit this week has worsened the situation and washed away some gains. What pains most is that Cyclone Ana hit at a time the country is far from recovering from the devastating effect of Cyclone Idai.
Thus, in considering the next budget, both Ministry of Finance and legislators should factor in the realities, including external factors, both natural and man-made disasters. It does not reflect well to be having economic growth assumptions drastically revised downwards year in and year out.
It is my sincere hope that the next budget will go beyond balancing figures, but trickle down to the masses to make a difference