By Chisomo Phiri
The Alliance for Democracy (AFORD) National Director for Economic Affairs, Chifipa ‘Chifi’ Mhango, has expressed concerns about the government’s fiscal expenditure patterns.
In a statement seen by this publication,Mhango, who is also the Chief Economist for the Don Consultancy Group (DCG), notes that the government’s spending habits are alarming, with a significant amount being spent on administrative expenditures rather than development-oriented projects.
He says in the first nine months of 2024, the MCP government spent Mk4.1 trillion, surpassing the previous year’s expenditure by Mk732.7 billion.
“However, only 24.7% of this amount was allocated towards development projects.
“This has raised concerns about the government’s ability to effectively manage the country’s fiscal position and its appetite for borrowing.
“A significant portion of the government’s expenditure, almost 75.3%, has been spent on administrative expenses such as travel, salaries, and allowances.
“This amount totals Mk3.1 trillion, which is equal to the total fiscal expenditure of the previous year.
“This is not a good reflection of a government that is serious about austerity measures,” reads the statement in part.
Mhango has warned that Malawi’s government debt is at over 81% of the country’s GDP, and at the current rate, projections indicate that it will reach 90% by September 2024 if not managed.
He has emphasized the need for cost containment and effective cost management through strict monitoring of government expenditure.
Further reads the statement:”AFORD is advocating for fiscal reform to ensure that fiscal expenditure reflects a development-oriented pattern.”
Mhango has stressed that the results of poor economic management and lack of coherent economic policies are clear and that there is an urgent need to position the Malawi economy towards aligning with the aspirations of its people in ending poverty, inequality, and unemployment.
“Malawi’s economic woes continue to worsen, with the country’s international trade dynamics in a precarious state.
“The nation’s foreign exchange reserves have struggled to reach Mk1 trillion on average monthly in the first nine months of 2024, with the total foreign exchange reserve position as of September 2024 standing at Mk980.8 billion.
“This marks a slight improvement of Mk39.4 billion, attributed to private sector accumulation.
“However, this is still unsustainable for the Malawi economy to absorb external shocks caused by global economic and geopolitical factors.
“The country’s import cover position remains unchanged from August 2024 to September 2024, at 0.5 months or 15 days.
“This severely limits the country’s ability to sustain the monthly importation of essential products like fuel and fertilizer,” the statement adds.
 National Director for Economic Affairs, Chifipa ‘Chifi’ Mhango, has expressed concerns about the government’s fiscal expenditure patterns. In a statement seen by…){kind=link}