Malawi in 16 percent budget hike
Lilongwe – Dr Ken Lipenga, Malawi’s Finance Minister, has said the country’s national budget will grow from US$1.13 billion to US$1.32b in response to inflationary pressure.
This represents a 16 percent increase on initial estimates.
Presenting his 2012/13 mid-year budget statement, Dr Lipenga said while budgetary implementation had been “successful in the first six months of the financial year, inflation meant costs of goods and services had gone up.
“These included procurement of drugs and medical supplies, purchases of teaching and learning materials, payment for subscription to international organisations, operations of foreign missions abroad and resources for implementing the Farm Input Subsidy Programme,” he said.
As such, he explained, recurrent expenditure would increase from US$922.8 million to US$1.06b.
Dr Lipenga announced an increase in gross official foreign currency reserves from US$82.9m to US$142m.
Much of Malawi’s budget comes from external sources. The Finance Minister said in the first half of the year, such inflows included US$350m from donors and US$220m in general budgetary and balance of payments support.
He forecast GDP growth for 2013 to recover to around 5.5 percent against a projection of 4.3 percent in 2012.
Critics said the budget review did not explain how the government would deal with the high inflation and interests, now hovering at around 40 percent.
There were also precious few indications how the country plans to chart a self-sustainable course that will see it relying less on donors.