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| Business |
| Mps tipped on budget |
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by
Gedion Munthali, 01 July 2006
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04:44:24
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Economic experts want MPs to scrutinise the budget in terms of why within the past two years, the Development Budget has remained almost the same while the Recurrent one has ballooned by about 200 percent, but people’s lives have not changed.
Institute for Policy Interaction executive director Rafiq Hajat said on Tuesday it is remarkable that people are not getting better service although the total budget has increased by about K80 billion between 2004 and 2006, with Recurrent expenditures distending very nearly every year.
“The fact is that the total budget of 2003-2004 budget was K59 billion and today the total proposed budget is K138 billion—a swell of about K80 billion. Within that period, the Development Budget has stagnated between 38 and 40 percent, while the Recurrent one has soared by about 200 percent, and yet people are not getting enhanced service,” observed Hajat.
“The question MPs must be asking before passing this budget is where the money is going,” he said.
Asked if he did not think that some of the rise in the Recurrent Budget did not result from inflationary and exchange rate trends over the period in question, Hajat said:
“Are you telling me that the inflation rose by 200 percent or the kwacha got devalued by that percentage over the period we are talking about?” questioned Hajat. “The answer is no, therefore that question does not arise at all.”
He added that MPs should also question allocations, for instance, to the Ministry of Justice, the Attorney General and Unforeseen circumstances which have been increased because, in the absence of justification, the monies have no relevance on enhancing people’s lives.
“Let someone explain the bearing of increased funding in the Attorney General’s department on poverty reduction and development,” demanded Hajat. “If there is no proper answer, which I personally do not expect, MPs must demand that the monies must be directed towards activities that directly affect people’s lives.”
Malawi Economic Justice Network (Mejn) acting executive director Mabvuto Bamusi saw things the same way, saying the Recurrent Budget has been ballooning over the years because of a couple of pressure points which would have been forestalled with proper planning, healthier management and safeguarded taste.
Bamusi said one such pressure point under the Recurrent Budget is debt repayment.
“Debt repayment is a statutory expenditure. According to the Public Finance and Management Act such expenditures must not be subjected to heavy scrutiny by MPs,” said Bamusi. “Being a statutory requirement to repay debt, government has had no option, but spend the money.”
“The implication of this is that the general public is paying dearly for past mistakes that generated the gathering of domestic debt, for example. It is now incumbent upon government to avoid such mistakes, so that resources are instead channelled towards the poor,” he explained.
Hajat argued that even with debt repayment, there was no justification for the astronomical rise of the Recurrent bill.
“Money for debt repayment stands at about K5 billion. Does this justify the rise on those percentages I have talked about?” he questioned.
Another pressure point under the Recurrent Budget, Bamusi said, is the Emolument Bill which has been mounting over the years.
“It is a statutory obligation that government should pay people. And there is nothing wrong with people’s pay being raised. What is of concern though is whether government must have all the people it has on its pay roll, and whether indeed those people deserve a pay rise,” argued Bamusi.
Travel by government officials is another pressure point which has contributed to the spreading out of the Recurrent Budget, Bamusi said.
“That the IMF, under the Poverty Reduction and Growth Facility (PRGF) asked government to come up with a proper travel policy speaks volumes,” he said. “In short everyone outside government believes a cutback of travel is desirable.”
He also noted that recent expenditures on fertilizer subsidy and importation of maize have built up pressure on the Recurrent Budget.
“But these are things that result from poor planning. Why should Malawi continue to face food shortages because of the drought when we are wasting all these waters?” he questioned.
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