The Malawian government made a decision to cut the 2018/19 financial year budget as the country has failed to collect enough revenue with some donors yet to fulfil funding commitments, according to Malawian Finance Minister, Goodall Gondwe.
Presenting the mid-year budget estimates in Lilongwe, Gondwe said the government considered a disbursement of $82.3 million from the World Bank when it formulated the budget for the 2018/19 financial year, which will end on June 30.
This disbursement is expected during the 2019-2020 fiscal year, which will begin on July 1 and has forced his government to increase domestic borrowing and cut some expenditure to fill the gaps, he adds.
Malawi’s parliament meets annually to deliberate and approve the next year’s budget. Gondwe said that the approved budget of $1.997 billion for the 2018/19 fiscal year has been revised downwards to $1.962 billion, while the approved estimate of revenue and grants at $1.715 billion has also been revised downwards to $1.611 billion.
“With these revisions, the approved net domestic borrowing has been revised upwards from $225.4 million to $294.7 million,” the minister says in a statement.
Gondwe notes that his government hopes it will manage to control expenditures by improving management and expresses optimism that Malawi’s economy is on its way up, citing a stable reduction in bank lending rates.