Let me get this straight. Is the Ministry of Finance, Economic Planning and Development not funding government ministries, departments and agencies (MDAs) because they are not submitting expenditure returns or due to insufficient funds at Treasury?
When The Nation first reported that the country’s 28 local authorities were yet to get their December funding deep into January, specifically other recurrent transactions (ORT) which finances day-to-day running of the councils, Treasury spokesperson Nations Msowoya’s explanation at the time was that the local authorities had not submitted expenditure returns to facilitate disbursement of the funds.
This tied in nicely with a media statement the fiscus issued recently that they would not release any funding to any MDA that fails to first liquidate the previous financing in line with the Public Finance Management Act.
The Treasury even proceeded to absorb itself of the responsibility for the delays. But the Treasury said it proceeded to fund district health offices (DHOs) because of the sensitive nature of the sector that directly deals with matters of life and death.
I think that is where we should have sensed very quickly that things were not as portrayed by the fiscus.
Thus, when it emerged this week that the Treasury did not fund all MDAs—not just councils—we should not have been surprised. Now we are being told that funding would be released on a “need basis” because during part of December they could only fund hospitals as the November 2015 funding was disbursed mid-month and this was expected to spill over to December since civil servants closed offices for a 10-day holiday.
“In December, everyone, except hospitals, was not funded. The funding for November was done around mid-month and it was meant to go into December. In December, people only worked for a few weeks because of the holiday,” explained Msowoya.
Now I have to ask: why was the funding for November released mid-month in the first place?
This question is particularly pertinent because by then the statement threatening no funding without expenditure returns had not been issued, so why was there a delay? Look, I am all for accounting for resources received and spent, but things are not adding up here.
The other issue is that funding disbursements are done on a monthly basis, not based on the number of days civil servants in a particular department will work. I mean that would be chaotic and a funny way of managing public financing and programming.
The fact is that the failure to release funding to MDAs should not and had nothing to do with the 10-day festive breather that public office workers were granted.
So, what gives? The fact is that government is failing to find the right message to citizens and other stakeholders that it is fast running out of cash to finance its operations on the back of below target tax revenue collection by the Malawi Revenue Authority (MRA), the drying up of budgetary support, which cushioned 40 percent of the national budget and—lest we forget—the unbridled looting of Treasury that may have cost the Treasury a whopping K577 billion in the five years leading to December 2014.
The truth is that government has abandoned the 2015/16 national budget after reality has finally caught up with the administration that the current fiscal plan was based on fake assumptions, was unrealistic and had all over it the hallmarks of disaster waiting to happen. It was a matter of when, not if.
Some stakeholders such as the International Monetary Fund (IMF) have called for sharp budget cuts, especially in areas that have proven to be a bottomless pit such as the Farm Input Subsidy programme (Fisp).
Others question whether we should be spending around K7 billion trying to build houses for people who find no drugs when they go to hospitals or do not have food to eat in the corrugated iron-roofed houses that are freebies from their broke government.
That is why I hope that as they redraw the current budget as part of the Mid-Year Budget Review coming up next month, Treasury and all MDAs will go line by line to remove potential waste or those programmes and activities whose value to the citizen is not immediately needed and redirect those resources to where they are needed most.
If government cannot do this then the country is in for an apocalyptic awakening.