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Facing our realities - Malawi budget speech 2002/03
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| 11. The 2002/2003 Budget framework |
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- Mr. Speaker, Sir, Honourable Members, presented before you are the relevant Budget Documents as follows: 2002/2003 Budget Statement as Budget Document No.1, 2002 Economic Report as Budget Document No. 2, Financial Statement 2002/2003 as Budget Document No. 3, and Draft Estimates of Expenditure on Recurrent and Capital Accounts for the financial year 2002/2003 (output based) as Budget Document No 4 A.
- Mr. Speaker, Sir, total revenues and grants for 2002/2003 are projected at K43.15 billion. Of this amount, K27.14 billion is from domestic resources, and K16.01 billion is from foreign sources in the form of grants and HIPC debt relief while total expenditures are estimated at K45.262 billion. Of the total estimated expenditures, Personnel Emoluments (PE) is estimated at K9.348 billion while Other Recurrent Transactions (ORT), including HIPC resources, are estimated at K14.964 billion. Mr. Speaker, Sir, development expenditure in 2002/2003 is estimated at K12.546 billion, of which K9.853 billion comprises foreign loans and grants while the difference is from local resources.
- Mr. Speaker, Sir, out of the total budget of K45.262 billion, the allocations to the priority ministries are as follows:15 percent for Education, Science and Technology; 10 percent for Health and Population; 5.5 percent for Agriculture and Irrigation; 4.1 percent for Water and 7.8 percent for Roads. Mr. Speaker, Sir, an amount of K1.672 billion has been allocated to subvented organisations, with the University of Malawi having the highest allocation of K900 million. Although there has been an increased allocation to the University of Malawi, the University will begin in the 2002/2003 financial year start admitting deserving full fee paying students. These will be in addition to those students who will be on partial and full scholarships. Implementation of these reforms will assist raise the revenue base for the University of Malawi.
- Mr. Speaker, Sir, in the spirit of the MPRSP, Priority Poverty Expenditures (PPEs) have been identified and will be protected. The PPEs include K101 million for agricultural extension and K225 million for small scale irrigation in agriculture; K100 million for borehole construction and K100 million for dam construction and rehabilitation in water; and K1.4 billion for rural feeder roads. Other PPEs are K54.9 million for small-scale mining and K56.5 million for small-scale fish farming; and K1.64 billion for Education, covering primary and secondary education; K1.6 billion for Health; K556 million for improving the quality of life for the most vulnerable; and K225.5 million for good governance.
- Mr. Speaker, Sir, Honourable Members, Special Activities cater for transactions that the Ministry of Finance and Economic Planning undertakes on behalf of the Government. Among the items included is an allocation of K150 million to meet the costs of ADMARC’s operations of social markets. Honourable Members will recall that costs associated with ADMARC’s operations of markets, which are not viable but are necessary under ADMARC’s social function have to be met by the Government. This allocation will also cater for restructuring costs of the corporation.
- Honourable Members are aware that Malawi experienced a serious food shortage in 2001/2002, which necessitated the importation of maize from the region. It is expected that the country will experience another food shortage in 2002/2003 of around 500,000 metric tonnes, which will be partly met by maize imports by donors of approximately 208,000 metric tonnes to meet the requirements of some 3.2 million Malawians that need assistance. Government plans to import about 250,000 metric tonnes in addition to the maize that will be brought in by donors.
- Mr. Speaker, Sir, The price at which the maize is sold is lower than the price required for the National Food Reserve Agency to at least break-even. An allocation, therefore, of K500 million has been set side in the 2002/2003 fiscal year to cover partly the loss. Mr. Speaker, Sir, the subsidy element of importing the maize could be higher than estimated. Therefore, unless our co-operating partners come in to support the purchase of the maize, Budget implementation in 2002/03 could be adversely affected.
- Mr. Speaker, Sir, the problem of food shortage experienced in 2001/2002 and to be experienced in 2002/2003 calls for Government to have a comprehensive food security and nutrition policy in place. The Government is, therefore, reviewing its food security policy. In addition, the Government is reviewing its agricultural policy within the context of the Malawi Agricultural Sector Investment Program (MASIP).
- Furthermore, in the 2002/2003 growing season, the Government plans to distribute agricultural inputs comprising seeds, fertilisers and legumes enough for 0.1 hectare to about 3 million eligible households. Please allow me to join His Excellency the President, Dr. Bakili Muluzi, to thank co-operating partners who are supporting Malawi on this program. The Government will also intensify winter cropping and irrigation where there are wetlands or dambos and where water sources for irrigation are available.
- Mr. Speaker, Sir, the financial position of David Whitehead and Sons is unsustainable. A decision has been made to restructure its operations pending a suitable investor being identified. A provision of K150 million has, therefore, been set aside for the restructuring.
- Mr. Speaker, Sir, Honourable Members, an allocation of K3.4 billion of HIPC Debt Relief resources will be available in 2002/2003. The proposed allocations for HIPC resources include K800 million for Education (teaching and learning materials, inspectorate, teachers’ houses and University teacher education), K800 million for Health (primary health care, drugs and health workers’ training) and K425 million for Agriculture (agricultural extension, targeted inputs program and small-scale irrigation). Others include K200 million for Water (construction of bore-holes and dams); K400 million for rural feeder roads; K125 million for Technical and Vocational Education; K50 million for small-scale mining; K50 million for small-scale mining; K100 million for Gender, Youth and Community Services; K225 million for the Police (community policing and Police Officers’ training); K50 million for Commerce and Industry (promotion of small and medium-scale enterprises (SMEs)); and K50 million for Tourism, Parks and Wildlife. These allocations are made to the priority pro-poor areas as articulated in the MPRSP and they will be protected.
- Mr. Speaker, Sir, the cross-cutting issues identified by the MPRSP have been mainstreamed in varying proportions. Notably, activities for intervention on HIV/AIDS have been incorporated in all ministries and departments. The National AIDS Commission will provide technical support to all the ministries and departments to ensure that all planned activities are implemented efficiently and effectively.
- Mr. Speaker Sir, the Government is committed to involving rural people in the management of their own destiny. In this case, the process of decentralisation has to be enhanced. The Government will during the 2002/2003 fiscal year start with two districts in each region in the delivery of services in the education and health sectors. It is hoped that during this process, adequate capacity at district assembly levels will be improved so that more districts can be involved in the delivery of services and hence the management of their own economic activity. This decision is in addition to the already existing approach where district assemblies have a separate vote and are being funded directly from the Ministry of Finance and economic Planning.
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