Govt operations post K1tn budget deficit in 2023

The government operations closed a calendar year 2023 with a K1 trillion budget deficit despite recording a surplus in November and December.

The Reserve Bank of Malawi (RBM) economic reports show that budget performance improved in the last months of 2023 purportedly due to inflows of grants post devaluation.

“The central government’s total revenues and expenditures for November 2023 were recorded at K430.0 billion and K387.4 billion, respectively. This resulted to a surplus of K42.6 billion.

“Total revenues increased by K179.8 billion (65.9 percent) to K430 billion in November 2023 from K259.2 billion in the previous month.

“This outcome was explained by increases of K125.7 billion and K92.7 billion in non-tax revenue and grants to K137.9 billion and K127.9 billion, respectively,” reads part of RBM November review.

However, rising spending obligations resulted in an annual deficit of 1,004.4trillion kwacha between January and December.

Recent RBM reports show government budgetary operations in a back-to-back surplus of 28.8 billion and 42.6 billion kwacha in December and November respectively.

This resulted in the quarterly surplus of 24.9billion kwacha between October and December 2023 –mainly attributed by inflows of grants after qualification of Extended Credit Facility (ECF).

However, the figures show an annual deficit of K1,004.4 trillion on calendar year 2023 as total revenues fell short of the K1.6 trillion expenditures.

Finance minister Simplex Chithyola Banda projected K1.28 trillion budget deficit for government’s fiscal year 2023-2024 which expires on 31 March.

Meanwhile, according to available figures, tax revenues stand at K1.5 trillion as at 31 December –with the Malawi Revenue Authority tasked to collect K2.2 trillion by 31 March.

The 2023-2024 budget was revised upwards from K3.79 trillion to K4.33 trillion during the midyear budget review of parliament.