Budget for wages and salaries revised upwards for the second half of 2020-2021 budget

* To finance recruitment of healthcare workers

* AstraZeneca COVID-19 vaccine doses are for 20% of the population

* Total requirement for this vaccine for the entire population is US$120.2 million

* Government is in discussion with cooperating partners to secure doses for the entire population

By Duncan Mlanjira

The provision for wages and salaries has been revised upwards from its approved amount of K523.7 billion to K525.3 billion, representing an increase of K1.6 billion which is budgeted to finance recruitment of health workers.

This was disclosed by Finance Minister Felix Mlusu in Parliament in Lilongwe on Friday in which he also said the Compensation of Employees budget line has also been adjusted upwards on account of an additional K2.5 billion to the contributory pension scheme that has been necessitated by the salary increase and new recruitment.


“The provision for Goods and Services, Madam Speaker, has also been revised upwards from the approved figure of K309.2 billion to K346.0 billion — this is on account of an increase in the unforeseen budget line of about K23.2 billion, of which K17.5 billion is towards COVID-19 pandemic management and treatment efforts and K4.5 billion is programed for re-administration of the Malawi School Certificate of Education Examinations.

“There has, however, been a reduction in the normal ORT for most Votes reflecting the scaling down of both local and external travel as a result of the pandemic.”

COVID-19 vaccine program

The Government secured AstraZeneca COVID-19 vaccine through the COVAX Facility and Mlusu told Parliament that these these doses are for 20% of the population — which is worth approximately US$40.0 million.

“The total requirement for this vaccine for the entire population is US$120.2 million. Government has further secured financing worth US$1.5 million and US$2.0 million from Sustainable Development Goals Acceleration Fund and the United States Government, respectively, for logistical and technical support.

“Madam speaker, I wish to inform the august House that currently Government is in discussion with cooperating partners for more resources so that we secure doses for the entire population. Already, the World Bank has indicated that they are preparing a package of support not only for vaccines but for wholesale COVID-19 operation in Malawi.

The Affordable Inputs Program

The provision for this program has been revised downwards from K160.2 billion to K142.0 billion as the number of beneficiaries in the database at the Ministry of Agriculture was revised down from 4.2 million farming families to 3.7 million.

President Chakwera during the launch of AIP

“Resources for maize purchase have been marginally increased from K10.0 billion to K10.4 billion, all of which was already spent during the first half.

“Going forward, I am pleased to inform this august House that in September 2020, Government assisted ADMARC to access a financing facility from the banks to the tune of K22.0 billion. This facility, Madam Speaker has not been fully utilised and will enable ADMARC to go early into the forthcoming agriculture marketing season.

“Furthermore, Madam Speaker, ADMARC will be allowed to use the proceeds from the sale of the previously purchased maize to continue purchasing new maize from this harvesting season. Additional resources for maize purchase will be provided in the 2021/2022 fiscal year.

Public Finance Management

Mlusu said the review of the Public Finance Management Act, 2003 is in its final stages and the Bill will be submitted to Parliament during the 2021/2022 fiscal year budget session in June 2021.

Coronavirus alert

He added that the Government went live with the new Integrated Financial Management Information System (IFMIS) on 1st July, 2020 on a pilot basis with 4 key modules and 10 votes.

“Initially, there were some implementation challenges which were as a result of inadequate end user training and network problems. These have been rectified leading to stabilization of the system.

“Users are now able to process their transactions with minimum support. Going forward, Government will roll out New IFMIS to all MDAs.”

Implementation status of the Treasury Single Account (TSA)

Implementation of the new IFMIS has taken the TSA concept into consideration and that the number of Government bank accounts has been reduced drastically for easy management and control.

Coronavirus alert

On payroll and pensions, Mlusu said following the deletion of Government pensioners who did not turn up for the head count exercise, it has managed to save over K400.0 million from the pension payroll during the first half of 2020/2021 fiscal year.

“The same is expected to be realised during the second half as no major changes are anticipated to the deleted list. The saved amount is being used to clear the backlog of pension payments in order to reduce the waiting time.

“The august House is further informed that Government carried another head count for all public servants on Government payroll. Just like the Pension Payroll Audit, the Civil Service Personnel Audit is aimed at bringing efficiency in use of public resources by ensuring that only bonafide civil servants are paid by Government.

“Field work for the Personnel Audit has been completed and the team is now consolidating data. The preliminary report is expected by mid-March 2021.

Affordable Inputs Program

“A few days ago, the Minister of Agriculture presented to this august House a report on the Affordable Inputs Program. It is very important, Madam Speaker to note that apart from ensuring food security, the AIP this year is expected to contribute significantly to this country’s economic growth.

Agriculture Minister Lobin Lowe

“Furthermore, this program has had other positive spill over effects on the society including job creation and economic empowerment. According to information from Smallholder Fertiliser Revolving Fund of Malawi, the number of people employed under the program increased substantially compared to years past.

“Small and Medium Enterprises in the transport and the real estate sectors were also empowered as they were very instrumental in the implementation of this program.”

On the Extended Credit Facility with the IMF, Mlusu said immediately after coming into Government, a decision was made to cancel the ECF program mainly due to a re-focus of policy objectives by Tonse Alliance Government.

“Furthermore, the IMF program that was inherited by the new Administration was almost off track and it would have required humongous effort to bring it back on track.

“As a stop gap measure, the Tonse Alliance Government and the IMF agreed on a second Rapid Credit Facility (RCF) which disbursed US$102 million to Malawi in October 2020, of which US$30.0 million was a direct budget support to the Government.

“I am pleased to inform the August House that Treasury has already commenced discussions with the IMF that will lead to negotiations for a new program which is expected to align its objectives with that of Government and will anchor the 2021/2022 fiscal framework and budget.