2015/16 Budget Revised Downwards By 23.7 Billion

Gondwe being led into the Chamber

To  embark  on  the  policy of  fiscal consolidation,  in  view  of  dwindling available  resources;  Government has decided to revise downwards the 2015/16    approved  budget by  K23.7 billion  from  an  approved figure  of K929.7  billion.

This means total budget for 2015/2016 will be K906.0  billion.

Minister of Finance and Economic Planning, Goodall Gondwe announced this in the National Assembly when presenting the budget review for the first half of 2015/2016 financial year.

He said in the next second half of the financial year, Government propose  to reduce  the  Recurrent  budget  by  just over  K17.1  billion and the Development Budget by sum of K5.6 billion.   

He said this  will  entail  that  for  the coming  months,  the  Treasury  will withhold  resources  that  are  intended for filling vacancies especially reducing the bloated” Civil Service.

He went on to say that in reducing Other Recurrent Transactions (ORT) the Cabinet  has  decided that  the  Treasury and  the  OPC  should  review  the various  perks including  travel,  vehicle and  fuel  entitlements  that  could  be scaled down.

He said the proposed reduction includes the development  budget through a suspension  of  a  few  projects  that  can be  removed  without  major impact  on economic  growth. 

He noted that there has  been  no significant  over  expenditures on budgetary performance vote by vote adding that the  performance  of  the budget  this  year  has  been better  than before  except  for  the  projected expenditure  on  FISP. 

On FISP he said the expenditure  relates to  the imports  of  fertilizers,  deep depreciation  of  the currency and the cost  of  procuring  fertilizers. He added that Government also shouldered other costs on the seeds for the programme since donors  declined  to  contribute  to the seed  subsidy whose  total  cost  is estimated  at  K9  billion.   

Among others on Budgetary performance, Finance and Economic Planning Minister Goodall Gondwe said total  revenue  and  grants  that  were targeted at  K386.1  billion  at  the  end of  the  first  half  of  the  2015/16 financial year  were  under-collected by K50.8  billion while Domestic  revenues that were  targeted  at  K312.4  billion fell  short  of  this  amount  by  K12.7 billion  down  to  K299.7  billion.  

He informed the House that although  a number  of  taxes performed  well,  the VAT  underperformed  considerably  by an amount  of  K5.6  billion. In  parallel, grants  performed  even  worse where the  target  of  K75.3  billion  was  under performed  by  K36.5 billion, less than half this targeted amount.

He therefore expressed need to strengthen  efforts at raising  domestic revenues  and  to  down  play  all  donor grants  in general  and  only  expect  to focus  more  on  development  loans from donors as a reliable mode of donor aid delivery.  

He however casted hope that Government is invigorating policies that aim  at  becoming  progressively,  more self-sufficient  in  budgetary matters than  has  been  the  case  so  far.