News Column

Zero-Aid Budget Excites Prof Chikaonda

September 3, 2014

Joseph Joshua Mwale

While others are worry of how Government plans to source revenue to finance the K742.8 billion 2014/2015 national budget, revered economist Professor Mathews Chikaonda told Malawi News Agency in an interview that the financial plan is an ideal package for the country especially at this moment when donors are reluctant to help.

Government has assumed that Malawi will not receive any budgetary support this financial year, hence the formulation of the zero-aid budget which has domestic revenues estimated at K525.3 billion.

Donors have not committed their support to the budget due to the looting and plunder of public resources at Capital Hill in Lilongwe where a whooping K13.6 billion was siphoned out in just six months in 2013.

And economist Professor Mathews Chikaonda feels the zero-aid budget is necessary under these circumstances.

"We have sometimes formulated budgets on assumptions that we will get donor funds, but that has not worked because that money for one reason or the other is never disbursed."

Chikaonda added, "Now government is saying we have no external support, let's manage our own resources. That's the best we can do as a country. Do we have a choice? I don't think so."

Professor Chikaonda also allayed fears that government will have tough time in financing the budget.

"If you make your calculations very well on how revenue is to be collected, you will notice that the deficit is only a K100 billion and that can be sorted out by the Reserve Bank of Malawi. The question now is not what government will do about the figures, rather, what will everybody do about the budget?" Chikaonda challenged.

Meanwhile, finance minister Goodall Gondwe has said amicable discussions are continuing with donors and it is hoped that grants could be received in the course of the year.

According to Gondwe, the European Union, the World Bank and the African Development Bank have indicated that they could provide budget support amounting to over K43 billion.

Said Minister Gondwe, "Nevertheless, as the pledges are conditional on demonstrated progress in the implementation of the agreed public finance management reforms, we have assumed that none will be received. However, we believe that by mid-year we will have made sufficient progress in implementing the public finance management reforms enough to achieve the critical mass necessary to trigger disbursements of the budget support."

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Source: AllAfrica

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