Revised budget up by K4.5 billion

Treasury has announced that the revised 2013/14 National Budget has gone up by K4.5 billion (about $11.2m) to K640.3 billion from the initially projected K635.8 billion.

However, Secretary to the Treasury Newby Kumwembe told the Budget and Finance Committee of Parliament in Lilongwe on Wednesday that the rise has come against a background of government trimming by K32 billion funding to its ministries, departments and agencies meant for recurrent and development expenditure in the wake of the Capital Hill cashgate.

He disclosed this yesterday when he appeared before the Budget and Finance Committee of Parliament in Lilongwe where he updated the committee on the impact of cashgate on the implementation of the national budget.

He attributed the increase in the overall budget, scheduled to be tabled in Parliament early next year during the Mid Term Budget Review meeting, to inclusion of interest payments accrued on arrears.

Said Kumwembe: “The increase is attributed to interest payments which were underestimated by over K50 billion and have since been adjusted to K88 billion, which is about 14 percent of the budget.”

On the funding cuts, he said government has cut K15 billion and K17 billion on generic goods and services, and domestically-financed non-priority development projects, respectively from the national budget.

Kumwembe also said projected government revenue and grants have been increased by K12.9 billion from K563.7 billion to K576.6 billion with the estimate of locally-sourced revenues shooting from K355.7 billion to K429.2 billion on account of improved revenue performance while expected grants have been reduced by K60.8 billion from K208 billion to K147.4 billion due to delayed disbursement of budgetary support.

He also said the Ministry of Finance has adopted measures aimed at closing the fiscal gap in the wake of deteriorating fiscal performance in the first quarter of this financial year.

Kumwembe said some of the measures include Malawi Revenue Authority (MRA) improving performance on tax collection; and intensification of collection of dividends from profit-making public institutions.

Early last month, the country’s donors under the Common Approach to Budget Support (Cabs) suspended their budgetary support until Malawi improves financial management following the Capital Hill cashgate where billions of kwacha in public funds were plundered.

The donors advised Malawi to revise the national budget to reflect how it will be implemented in the absence of donor funds.