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Monday, July 15, 2024

Cyclone Freddy: Gwengwe outlines adjustments on 2023/24 Budget

By Lovemore Khomo

On Tuesday, Minister of Finance Sosten Gwengwe has pronounced some adjustments to the 2023/2024 budget plan as measure to help cushion effects of Cyclone Freddy.

Speaking during his winding up statement on the budget motion before members goes jnto committee of supply, the Finance Minister pointed out that macro-economic assumptions used to prepare the budget have been shifted because of the devastation that happened mainly in southern region of the country.

Gwengwe told the house, “The GDP of 2.7% in 2023/24 may not be obtainable as we speak. But only prudent thing that we can do is to reduce the budget in tandem with expectations, otherwise then our projected debts will just skyrocket.”

“And that might create inflation and all sorts of evils that come along with such kind of policies. So, only bold thing we had to do is be realistic and see what is on us, what is on the ground and see how best we can respond,” elaborated Gwengwe.

He has also explained that government has reduced the budget by K80 to K100 billion pegging the budget at K3.7 trillion, rather than K3. 8 trillion pronounced earlier in February.

“Now, there is need to allocate more resources towards some other areas. Cyclone Freddy has devastated infrastructure, affected livelihoods, and as we finish assessments with a help of our colleagues at EU, World Bank and also UN together with a couple of government engineers on both damage and costs then will be able to see how best to intervene.” He said

Outlining priority activities that need provision of more resources Gwengwe said “First, we needed to look at Roads Authority mantainance budget which was pegged at K9 billion that was not enough and we have added another K6 billion to that line making it K15 billion.”

Secondly, he said the budget has also introduced some levies within the pump prices build up mechanism on fuel, to solicit some levies.

He added ” We have been able to release within the price build up K54 per liter effective 1st April, so that amount money being collected should no longer go to construction of MERA offices, doing some other things which we think are not as important now. And that will give us another K30 billion which will go to the budget for Roads Authority continue carrying out roads maintenance.”

He reminded the house that resources for maintenance will not be on the budget, but will definitely be off the budget and the ministry is working with partners to develop some money bills that can go towards the infrastructure rebuilding.

Gwengwe also told the house that Malawi Defense Force will procure two new helicopters as they have already discussed with it’s hierarchy to top up the sum that was budgeted to repair broken ones.

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