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.