Treasury has directed the DRTSS that with immediate effect, it should start remitting all revenue it collects directly to the Reserve Bank of Malawi (RBM), a move some economic commentators fear would cripple the operations of the directorate.
But Treasury spokesperson, Nations Msowoya, defended the directive describing it as being in line with the current government policy on such accounts.
The Directorate of Road Traffic Safety Services (DRTSS) is one of the government’s revenue-generating departments that was operating outside the government’s revenue system, as it was using some of the revenue it collects for staff salaries and operations, including payment for the recently-implemented Malawi Traffic Information System (Maltis).
The directive comes a few months after government instructed parastatal bodies to be remitting 60 percent of their revenue to the Ministry of Finance.
The new policy means that the directorate’s development operations will now be at the mercy of Treasury which has been facing financial problems.
DRTSS will now have a status similar to the Immigration Department which, despite collecting billions of kwacha, waits for Treasury to fund its operations. The Department currently has a K3 billion debt with suppliers which government is failing to pay.
Director of DRTSS Jaques Mononga refused to comment on how the new arrangement will affect the directorate’s operations other than just saying it was a government procedure they have to follow.
DRTSS projected that it shall exceed its K2 billion target for the 2015/16 financial year.
Mononga, however, pointed out that people will continue paying through NBS Bank satellite branches situated in various offices of the directorate and after a few hours, the bank will be transferring the money to RBM.
Budget and Finance Committee of Parliament chairperson, Rhino Chiphiko, cautioned that the move could have a negative impact on the accountability of the funds, a task that was easier when done at directorate’s level.
Said Chiphiko: ‘‘The issue is all about cash-flow management for the government. It seems this is one of the government’s desperate mechanisms to ensure they have sufficient cash immediately for disbursement. It‘s like a shop owner who soon after making a sale, goes to use the money”.
Chiphiko argued that the arrangement would cripple the operations of the directorate as they cannot operate without requesting for funding from the Treasury.
He called for a clear road map on how the issue of suppliers and other running costs will be managed within the spirit of the Public Finance Management Act.
He also asked Treasury to clarify how the record keeping between the directorate and the Reserve Bank of Malawi will be done and how the arrangement will support the directorate on its development activities.
Chancellor College economics professor, Ben Kalua, expressed reservations over the new arrangement fearing that centralising the directorate once more may be detrimental to public accountability.
Said Kalua: ‘‘My fear is that this whole issue may revert to the old system which we all felt was not all that ticking. It can actually lead to a whole lot of challenges if government doesn’t come out clear on why the sudden change of heart.’’ n