“Mr. Speaker, Sir, I wish to emphasise to the Honourable Members that our economy is still passing through turbulent times. I regret that we have not yet established a stable macroeconomic environment in which low inflation and interest rates prevail, and where the variability of the exchange rate is narrow and predictable.”
This was Finance, Economic Planning and Development Minister Goodall Gondwe in his Mid-Year Budget Review Statement he made in Parliament last week.
In just one brutal paragraph, Gondwe had summarised the status of our economy and it is not pretty.
We know that. Life has become unbearable for the majority of Malawians as prices of goods and services have risen sharply while incomes have largely remained flat and, in real terms, got eroded.
The underperformance of the Malawi Revenue Authority (MRA), while partly attributable to its inefficiency, is also reflective of the real sector’s suffering.
The private sector is battered and can no longer produce as much milk as it used to feed the tax bull.
That is why budget cuts are inevitable, a necessary evil and Gondwe had proposed to slash K23.7 billion from the national budget, with institutions such as Judiciary and the Ministry of Health’s development budget losing out.
But with such a dire situation, I am curious to hear how Gondwe will justify the K2 billion increase to the Ministry of Foreign Affairs and International Cooperation; the K1.3 billion to the Malawi Defence Force (MDF) and the K1.4 billion extra funding to the Malawi Police Service.
If this money is for additional wages and salaries, wasn’t it factored in the approved budget? And didn’t Gondwe talk of a hiring freeze?
Should government really be starving such sectors as health to fatten up our security and diplomatic establishments?
Should Treasury be going to the market to borrow to finance this?
And in cutting funding to crucial governance institutions such as the Anti-Corruption Bureau (ACB) and the Malawi Law Commission, what message is government sending?
Is the administration saying it has given up on fighting corruption? Does government want to signal free for all graft by weakening the ACB? How is the ACB supposed to pursue Cashgate cases with reduced funding?
Or is government saying Cashgate, which is partly responsible for the fiscal crisis the country is in, no longer matters?
Members of Parliament (MPs) need to do their jobs by going through the revised budget line by line to ensure that allocations and cuts are fair and reflective of national priorities.
On that note, let me just share what a certain civil servant shared with me as feedback this week.
I am no expert in this, but take it from me, the National Audit Office (NAO) requires serious reform because officers there are just like the rest of civil servants; they benefit from the loot. Just look at the way they conducted the civil service audit.
I personally feel that making controlling officers as cheque signatories will drastically reduce fraud. The current system of having the Accountant General (AG) sign cheques for payments he doesn’t understand or know is not on. The IFMIS is designed in such a way that a fraudulent payment can be processed as a normal one and the unsuspecting AG will sign as if it is normal.
The IFMIS software should be able to generate monthly reports than requesting ministries, departments and agencies (MDAs) to be submitting reports. The ones from MDAs should have been for crosschecking and not as end in itself as it is subject to manipulation. A dedicated team from the AG should be assigned to do this monthly using the IFMIS.
There’s need to be publishing monthly funding in the media for public information. They can exempt the so-called sensitive institutions which can be lumped into one figure. MRA publishes revenue collected monthly and so does the National Local Government Finance Committee on funding to councils, so why should this not be possible? If we don’t promote transparency, we may not go far. These are layman’s views, but with some knowledge of the goings-on.
Concerned Civil Servant