Malawi’s parliament rejects mini-budget

LILONGWE – Malawi’s parliament has rejected an US$80 million supplementary budget for the 2006/07 fiscal year, as legislators battle government over how to spend billions of dollars in debt relief.

The Malawi Congress Party (MCP) and United Democratic Front (UDF) joined forces to reject the additional budget, accusing President Bingu wa Mutharika’s government of failing to justify the extra spending. “Government has failed to point out why they need additional resources and what they want to use them for,” MCP’s finance spokesman Raspicious Dzanjalimodzi said late on Wednesday.”If additional resources have to be approved, we need to know what happened on the ground,” he said.The World Bank and the International Monetary Fund cancelled US$2,9 billion of Malawi debt in September last year.But Malawi remains one of the world’s poorest nations with annual per capita income of about US$160, and continues to rely heavily on foreign aid despite the debt relief.The supplementary budget, which would have raised main budget spending for 2006/07 to US$220 million, was defeated by 86 votes to 74.According to Malawi law, the finance ministry can still spend the additional funds but must get the money approved before the end of the fiscal year on June 30.Finance Minister Goodall Gondwe accused the opposition of denying the country’s poor access to the massive debt relief.”This is putting the lives of the poor at stake but we have to think again about what to do with the resources from HIPC (the Heavily Indebted Poor Countries debt relief programme).”There has been political turmoil since wa Mutharika walked out of the then ruling UDF in 2005, prompting calls for his impeachment.An anti-corruption drive launched by wa Mutharika has also targeted many close aides of former president Bakili Muluzi, leading to antagonism between the former friends.Nampa-Reuters”Government has failed to point out why they need additional resources and what they want to use them for,” MCP’s finance spokesman Raspicious Dzanjalimodzi said late on Wednesday.”If additional resources have to be approved, we need to know what happened on the ground,” he said.The World Bank and the International Monetary Fund cancelled US$2,9 billion of Malawi debt in September last year.But Malawi remains one of the world’s poorest nations with annual per capita income of about US$160, and continues to rely heavily on foreign aid despite the debt relief.The supplementary budget, which would have raised main budget spending for 2006/07 to US$220 million, was defeated by 86 votes to 74.According to Malawi law, the finance ministry can still spend the additional funds but must get the money approved before the end of the fiscal year on June 30.Finance Minister Goodall Gondwe accused the opposition of denying the country’s poor access to the massive debt relief.”This is putting the lives of the poor at stake but we have to think again about what to do with the resources from HIPC (the Heavily Indebted Poor Countries debt relief programme).”There has been political turmoil since wa Mutharika walked out of the then ruling UDF in 2005, prompting calls for his impeachment.An anti-corruption drive launched by wa Mutharika has also targeted many close aides of former president Bakili Muluzi, leading to antagonism between the former friends.Nampa-Reuters