According to Minister of Finance, Economic Planning and Development Joseph Mwanamvekha, there is fiscal confidence despite the procurement, fraud and interest on debt being major risks to the 2018/19 National Budget implementation.
The current economic environment has seen the International Monetary Fund (IMF) warning Malawi against overborrowing, while the current fiscal deficit is 32% higher than last year’s fiscal deficit of MK183.621 billion. In the 2018/19 financial year, the Malawi government will spend a projected K183 billion (3.4% of GDP) as interest payments for the debts.
Mwanamveka was objective enough to point out the risks that come with the 2019/20 budget. “The major risk that I am seeing is procurement. This is where we are losing a lot of revenue. There are some MDAs that are committing on behalf of government without Treasury knowing. They are creating contingent liabilities on the part of government,” he said.
In other news, the Budget and Finance Committee of Parliament has advised Treasury to consider implementing a zero-deficit budget to cushion the country from rising public debt stock.