Finance Minister Ken Lipenga, on Saturday, walked in Parliament in Lilongwe with a K638.2 billion budget for the fiscal year 2013/14 and assurances of government’s continued tight fiscal discipline.
Lipenga’s fat purse is premised on projections for total revenues and grants pegged at K603.4 billion in the fiscal year ahead, split into 59 per cent from domestic resources and the remaining 41 per cent – about K240 billion – in donor grants.
“We intend to continue with a tight fiscal and monetary policy stance to ensure that government operations do not contribute to inflation and crowding out of the private sector. In short, Mr. Speaker, Sir, we should continue to strive to live within our means,” he said.
Government expects that of the total domestic revenues (taxes) will bring into the kitty about K328.1 billion while the non-tax revenues are expected to make a contribution of an estimated K35.0 billion. The budget has been broken into K175.0 billion development expenditure and K463.1 billion recurrent expenditure with a projected deficit of K34.8 billion which is expected to be financed by a K42 billion foreign borrowing.
“Within the context of a tight budget, government remains committed to strict expenditure controls and substantive reforms in order to strengthen and promote a culture of enhanced transparency and accountability in the management and reporting of public finances to avoid over-expenditure,” said the Finance Minister.
He said his new budget has set focus on priorities in the Economic Recovery Plan and the Malawi Government Development Strategy (MGDS) II; Agriculture and Food Security, Social Support and Protection, Education, Health, Transport, Tourism, Mining and Energy. The budget, for example, has allocated K60.1 billion to the 2013/14 Farm Input Subsidy Programme (FISP), K99.19 billion for education and about K500 million for the school feeding programme. It has also made significant tax cuts in the hope of growing the energy, transport, tourism and mining sectors.
On the performance of his 2012/13 fiscal year budget, Lipenga expects to spend a total of K479.1 billion by the end of the year, K4.7 billion more than projected. He attributed the development to increased foreign financed development expenditure which is said to have increased by K6.4 billion in the said fiscal year.
Lipenga took time to address Parliament on the appetite for subsidies among Malawians, observing that the tendency is now increasingly coming under the microscope among many who would like it left behind. He said during pre-budget consultations some citizens desired to see government implement policies that will stop some subsidies except for those that target the poor and address salary-wage-good and service imbalances.
“What this means is that we need to examine how to ensure that sufficient resources are provided to improve efficiency. Much as we thank the development partners and the tax-payers in their respective countries for their generosity, time has come to start asking ourselves whether this is sustainable,” he said, wondering if Malawians are not asking for too much from their government through the subsidies without themselves investing for the future.
