Gondwe spells out measures to cut spending

Minister of Finance Goodall Gondwe has revealed measures which government has put in place to cut spending.

When he was presenting midyear budget review in Parliament on Friday, Gondwe said the measures include a reduction of 10 to 20 percent of fuel allowances across the board.

He noted that the reduction of fuel allowances will also help to reduce Malawi’s overall demand for fuel.

According to Gondwe, government will also make a deep cut in the number of personnel that are now provided unofficially with motor vehicles and government will not pay for the maintenance of such motor vehicles.

On travel of government officials, Gondwe said that business class travel could be reduced and a limited number of officials will use it.

“In general these measures merely supplement the fact that Responsible Controlling Officers in response to the cuts in travel budgetary lines will reduce the number of official missions,” Gondwe said.

He however revealed that the measures are still being discussed and will be confirmed by the Chief Secretary and Secretary to the Treasury.

On the mid-year budget review exercise, the minister said it will result in a small reduction of the budget by about K9.3 billion while total revenues and grants will register a small increase of K2.6 billion from the original budgeted figure of K1.127 trillion to K1.130 trillion.

“In terms of overall budget, after these budgetary adjustments, it will be seen that the budget deficit is programmed to improve from K195.6 billion down to K183.6 billion.

“The domestic borrowing will move a minimal figure from K27.8 billion to K33.7 billion,” he said.

Gondwe also hailed the review exercise saying it will not lead to macroeconomic instability in form of a higher rate of inflation but will maintain the downwards trajectory of the rate of inflation which this year is expected to be 11 percent  against 20 percent in 2016.