MALAWI: Fiscal discipline pays dividends

[ This report does not necessarily reflect the views of the United Nations]

LILONGWE, 25 Feb 2005 (IRIN) - Non-governmental organisations in Malawi are keeping a close eye on state spending in a bid to ensure that recently received international aid benefits the most vulnerable communities.

Minister of Information and Tourism Ken Lipenga last week boasted that the government had only borrowed US $4.4 million internally, against a projected rise in borrowings of US $5 million by December 2004.

While donors have welcomed President Bingu wa Mutharika's zero-tolerance campaign against corruption, they continue to insist on greater fiscal discipline.

In 2001 the International Monetary Fund and major Western governments barred budget support for Malawi as a result of government overspending - up to 80 percent of Malawi's development budget is provided by donors. However, Mutharika's promise of firmer controls over state expenditure have found favour with donors, and Malawi has received US $62 million in budget support since he took office earlier this year.

Most Malawians, however, want to see the government's promises on poverty alleviation honoured.

Collins Magalasi, national coordinator of the Malawi Economic Justice Network (MEJN) said although some government departments had overspent in the past six months, the main culprits, such as the foreign affairs ministry and the ministry of agriculture, had stayed within their allocations.

He noted that State House and parliament had spent just over a third of their budgets during the past six months, while the Malawi Revenue Authority and the ministry of finance had slightly exceeded theirs.

Magalasi told IRIN the overall picture was encouraging, as "it has shown prudent fiscal discipline".

However, development NGOs agree that much more needs to be done if the government was to achieve some progress in tackling widespread poverty.

The residents, for example of Chinsapo township, about 6 km from the capital, Lilongwe, have yet to reap the rewards of the resumption of aid. The roads are dusty and many in the community rely on nearby swamps for cooking water - at US 18 cents per pail, they cannot afford to buy water from a kiosk.

Anderson Phiri, a township resident, told IRIN: "People here want to see what the government promised them, being implemented: they want better roads and water facilities; they are also waiting to have the much-talked-about loans given to them, so that they empower themselves economically."

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