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The Economics Association of Malawi (Ecama) has estimated that the total expenditure in the 2004/2005 budget is likely to be around K80 billion based on cash flow figures.
But Finance Minister Goodall Gondwe said it was too early to tell because negotiations are still going on with donors and key stakeholders.
“It is difficult to tell now because negotiations are still going on,” said Gondwe.
Ecama spokesman Perks Ligoya said on the sidelines of a public talk on PRSP review in Lilongwe on Friday that the reasoning behind the figure is arising from an amount of K20 billion which has already been taken up in one quarter.
“This is based on cash flow figures,” said Ligoya, disclosing further that the body of economists also estimates that the 2003/2004 likely out-turn will be around K77 billion, about K22 billion above the total expenditure of K55 billion which Parliament approved.
During the function, economists also questioned the point of government opening consultations with stakeholders when its skeleton budget has already impressed some donors who have already seen it.
“What will happen should stakeholders, during the consultations, not be happy and make demands that might necessitate changes to some of the things to which some donors have already flashed their thumbs up,” questioned one economist Friday during a public talk on the review of the Malawi Poverty Reduction Strategy implementation.
“It means the consultations will be cosmetic,” he added.
Pre-budget consultations started on Monday at Le Meridien Capital Hotel in Lilongwe.
In his presentation, Ligoya called on all players to join hands assisting the current administration through reinforcement of budget monitoring, saying finger pointing will be unhelpful since “a wasteful government already packed up”.
The former senior economist at IMF said the Mutharika administration will have to reverse the trend that has squeezed Malawi against the wall of poverty, by among other things prioritising expenditure towards poverty reducing activities.
He expressed concern that during the previous budget K29 billion was allocated for pro-poor expenditures, but government ended up spending K27 billion, while statutory expenditures were allocated K10 billion, but K14.7 billion was spent. Statehood activities were allocated K2.7 billion, but actual expenditure came to K12. 7 billion.
“This explains why Malawi is not just poor, but poorer,” said Ligoya.
Ligoya trusted that Gondwe, retired head of the IMF African Department, will channel more resources towards pro-poor activities as he was part of the conceptualisation of the poverty reduction strategy, away from the structural adjustment approach.
“We know he believes in the poverty reduction strategy,” said Ligoya.
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