By: The Malawi Star
Failure by Malawi government to meet revenue collection in the first half of the financial year has seen the National Budget being reduced from K929.7 billion to K906 billion.
The budget has been slashed by K23.7 billion from which government will make cuts in various departments in order to meet the demands of the reduced budget.
Cabinet ministers will now see the wrath of the current economic crisis after being told that government will scale down perks including travelling vehicles for ministers and other officials from government departments.
Finance Minister Goodall Gondwe presented the slashed budget in Parliament on February 26 in which he admitted that Malawi’s economy is passing through hell.
“We are yet to establish a stable macroeconomic environment in which low inflation and interest rates prevail. The exchange rate is unpredictable at the present,” he said.
He further reminded the house that inflation rate has remained high since 2012 in which former President Joyce Banda devaluated the local currency with more than 40 percent.
He also blamed the loss of forex on donors who withdrew their aid following cashgate scandal from which billions of money was pocketed by selfish people between 2012 to 2013.
However, the Finance Minister announced that government will take four points of action to stabilize the economy.
The four point plan will focus much on empowering smallholder farmers to produce leguminous crops to increase foreign exchange from the exportation of the crops.