|
|
|
2002/03 POST-BUDGET REPORT
|
|
| 1.4 Poverty Priority Expenditures |
| |
Poverty Priority Expenditures (PPEs) were defined during the formulation of the PRSP Findings to Date document. PPEs are expenditure items that are believed to have the highest impact on poverty reduction. This is the first time that the Budget Documents make reference to the PPEs and the Committee is acknowledges that the PPEs have been listed in the budget documents as "Protected Expenditure" [See Budget Document No.3 page 18]. The Budget and Finance Committee has always recommended that budget cuts should not affect the allocation given to the PPEs.
During the 2001/02 budget, there is no single PPEs that received all the funds originally allocated to it. Budget cuts affected each PPE, with teacher training and tourism using only 37% of the original allocations. Annex 1 lists the approved and revised allocations, and the utilisation rate of the funds for all the PPEs during the 2001/02 budget. The Committee notes the following:
- The approved allocation for all PPEs was MK7.4 billion. Government was to fund MK4.46 billion or 60% of the total and the rest was to come from HIPC resources. According to Annex 2, Government funded 88% of its approved allocation whereas the utilisation rate for HIPC funds was only 68%, for an overall utilization rate of 80 %. Total HIPC inflows for the 2001/02 budget are estimated to be more than MK3.4 billion. The Committee wishes to know why only MK2.0 billion was utilised. Is the rest of the money still available in the HIPC account at the Reserve Bank of Malawi?
- The Committee and the PRSP considers Agriculture Extension as one of the highest priorities for pro-poor growth. According to the budget document No.4A; Government did not use any of its own resources to fund extension services. Instead, MK165.4 million of HIPC resources were utilised out of an approved allocation of MK202 million.
The information provided in Budget Document No.4A (page3) differs with that given on page 138 of the same document. According to the latter, the approved budget was MK62.6 million and total expenditure on Extension Services was MK318 million. In the budget document No. 3 page 18, the approved allocation was MK207 million and the revised expenditure is MK170.7 million. The Committee is concerned with such huge differences in the figures and wishes to know the correct figure?
- Agriculture Extension will have an allocation of MK100 million in 2002/03. This represents more than 50% reduction in the original allocation in 2001/02. The Committee recommended an increase for agriculture extension in 2002/03. The Committee strongly recommends that the proposed allocation of MK100 be revised upwards to a figure not less than that of the 2001/02 allocation.
- In the 2002/03 Budget, there are several new PPEs that were added to the original list. The initial list was arrived at in a consultative process as part of the PRSP process. It is critical that the same process be followed each time there may be need to add additional items to the list of PPEs. The Committee may agree with the choice of the additional items but that does not justify the single-handed approach taken in deciding the items to add as new PPEs. The allocation of HIPC resources to the different PPEs should be done in a consultative process.
|
|
Related documents