Swollen wage bill bloats ‘nominal’ budget – Capital Radio Malawi
23 September, 2023

Swollen wage bill bloats ‘nominal’ budget

Finance authorities are attributing the swollen expenditure of the current budget to unavoidable spending needs in wages and salaries.

The midyear budget which members of parliament passed on Monday has been increased by 12 billion kwacha to K2.85 trillion from K2.84 trillion.

According to Finance Minister Sosten Gwengwe, fixed recurrent expenditures like salaries could not be foregone.

“When you look at consumption you will be arguing things like salaries, there is no way you can reduce a salary of an employee and you have no choice, you need to provide for that consumption because people will need the salary at the end of the day.

“Then you have some other projects for example the special economic zones under the ministry of trade where not so much action has happened for the past few months and we had allocated about 1billion kwacha  for that project,’”Gwengwe said.

Gwengwe says the slight increase of the budget in kwacha terms does not reflect a real term increase, in view of the recent devaluation and inflation pressures.

“The money won’t be absorbed in the next two or three month therefore it will be like we are cutting the development budget but essentially it’s about absorption, it’s about our speed in executing the projects,” Gwengwe added.

In her remarks, Chairperson for Budget and Finance committee of parliament Gladys Ganda expressed concern with the tendency of unplanned recruitments which are ballooning wages and salaries.

“We just hope that various ministries will put to good use the funding which have been allocated, but we just noticed that planning was probably poor in the sense that you could come up with an adjustment only to curter for salaries.

“As committee we don’t believe that you could just wake up one day and think of employing people that could have been employed long time ago,”Ganda argued.

Ganda mentioned the Malawi Police service as well as forest and natural resources as some of the departments which employed extra workers in the midst of the fiscal year.

The country’s wage bill has always been among the list of check that are constantly made in International Monetary Fund (IMF) reviews.

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