Financial Statement Final

7/31/2019 Financial Statement Final

1/52

BudgetDocumentNo.3

DRAFT

2012/13 Financial Statement

MalawiGovernment

MinistryofFinance

POBox30049

Lilongwe


2/52


3/52

MinistryofFinance2012/13FinancialStatement Pagei

2012/13 Financial Statement


4/52

Table of Contents

Abbreviations and Acronyms................................................................................ iv

1 Introduction.. ................................................................................ 1

2 THE 2010/11 FISCAL YEAR PERFORMANCE 2

2.1 Revenues and Grants ..........................................................................................................................4

2.1.1 Domestic Revenues .......................................................................................................................4

2.1.2 Grants ...........................................................................................................................................5

2.2 Expenditures . ..............................................................................6

2.2.1 Recurrent Account Expenditure .......................................................................................................7

2.2.2 Development Account Expenditure.. ................................................................................................ 7

2.3 Overall Balance .................................................................................................................................83. THE 2011/12 FISCAL YEARPERFORMANCE................................................................................ 9

3.1 Introduction......................................................................................................................................... 9

3.2 Revenues and Grants ........................................................................................................................ 11

3.2.1 Domestic Revenues .....................................................................................................................11

3.2.2 Grants ............................................................................................................................................12

3.3Expenditure.. ..................................................................................................................................... 13

3.4 Overall Balance and Net Lending

4. ESTIMATES OF REVENUES AND EXPENDITURE FOR THE 2012/13 FISCAL YEAR

............................................................................. 14

.........14

4.1 Introduction....................................................................................................................................... 15

4.2 Revenues and Grants ........................................................................................................................17

4.2.1 Domestic Revenues .....................................................................................................................17

4.2.2 Grants in 2012/13 Fiscal Year....................................................................................................... 17

4.3 Projected Expenditure and Net Lending............................................................................... 17

4.3.1 Recurrent Expenditure....................................................................................................................18

4.3.1.1 Transfers to Local Government Councils ............................................................................

4.3.2 Development Expenditure........................... ............................................................................

....... 18

....... 20

5. MALAWI GROWTH AND DEVELOPMENT STRATEGY II AND THE NATIONAL BUDGET.....21

5.1 Introduction....................................................................................................................................... 21

5.2 The Linkage between MGDS II and the National Budget................................................................. 21

MinistryofFinance2012/13FinancialStatementii


5/52

List of Tables

Table 1: 2010/11 Approved and Revised B udget and Actual Outturn (K million) .....................................3

Table 2: 2011/12 Approved and Revised Budget Performance (K millions) ..............................................9

Table 3: 2012/13 Budget Estimates (K million).. ............................................................................ .. 16

Table 4: Transfer to Councils by Sector .............................................................................19

Table 5: MGDS Allocations in 2012/13 Estimates (K million) ................................................................ 22

Table 6: MGDS Allocations as a Per centagein2012/13Estimates ...........................................................23

Table of Figures

Figure 1: 2010/11 Domestic Revenue Outturn.. ............................................................................... 5

Figure 2: 2010/11 Performance of Grants.. ............................................................................... 6

Figure 3: 2010/11 Expenditure by Category................................................................................. 7

Figure 4: 2011/12 Domestic Revenue and the Likely Outturn ................................................................... 11

Figure 5: 2011/12 Grants Performance by Category.. ............................................................................ 13

Figure 6: 2011/12 Expenditure by Category............................................................................... 13

MinistryofFinance2012/13FinancialStatement Pageiii


6/52

Abbreviations and Acronyms

AfDB African Development Bank

DfID Department for International Development

EU European Union

FISP Farm Input Subsidy Programme

GDP Gross Domestic Product

IMF International Monetary Fund

KPA Key Priority Area

LDF Local Development Fund

LUANA Lilongwe University of Ag riculture and Natural Resources

MDG Millennium Development Goal

MGDS Malawi Growth and Development Strategy

MRA Malawi Revenue Authority

MTEF Medium-Term Expenditure Framework

MUST Malawi University of Science and Technology

NAC National AIDS Commission

ORT Other Recurrent Transactions

PE Personal Emoluments

PFMA Public Financial Management Act

SWAp Sector Wide Approach

USAID United States Agency for International Development

MinistryofFinance2012/13FinancialStatementiv


7/52

1 Introduction

In accordance with the relevant provisions of the Public Finance Management Act (PFMA) of

2003, the Ministry of Finance is required to prepare and submit to the National Assembly a

Financial Statement. The Financial Statement summarizes the financial outturn of the

Government expenditures and inflows for the preceding financial years in this case the 2010/11

and 2011/12 Fiscal Years and proj ections for the forthcoming financial year and the two outer

years in this case 2012/13 through to 2014/15. It also briefly discusses the relationship between

theexpendituresofGovernmentandtheMalawi Growth and DevelopmentStrategy(MGDS).

MinistryofFinance2012/13FinancialStatement Page1


8/52

2 THE 2010/11 FISCAL YEAR PERFORMANCE

The 2010/11 Budget was formulated against a background of global economic recovery from the

2008 worst economic recession since the 1930s. This economic recovery was mainly driven by

high growth rates in some developing countries especially Latin America and Asia where growth

was as high as 8.7 percent in 2010. Globally, the economy grew by 4.3 per cent in 2010

compared to a contraction of 0.5 per cent in 2009. Sub Saharan African economies weathered

well the global economic recession with the growth rate of 4.7 per cent compared to a growth

rateof2.1percentin2009.

The 2010/11 Budget was also formulated against a background of two fundamental challenges in

the domestic economy. Firstly, the country was hit by shortage of foreign exchange which

affected importation of raw materials as well as essential services and commodities such as drugs

and fuel. Secondly, intermittent power supply affected manufacturing and production of goods

and services. The 2010/11 Budget therefore was prepared to curb spill-over effects of the global

economic recession while at the same time, guaranteeing a sound macroeconomic environment

where both public and private sector organizations were to flourish. The Budget also targeted adomestic debt repayment of 1.5 per cent of GDP and an improvement of fuel supply and import

cover to at least 3 months. This section discusses the specific allocations and outturn in 2010/11

Budget.

MinistryofFinance2012/13FinancialStatement2


9/52

Table1:2010/11 ApprovedandRevisedEstimate and ActualOutturn(K million)

2010/2011Approved

Estimate

2010/11Revised

Estimate

2010/11

Actual

Variance

(Actualminus

Revised)

Revenue and Grants 287,117 296,908 273,252 (23,656)

Revenue 201,748 212,574 208,923 (3,651)

Tax revenue 171,196 175,022 176,974 1,952

Non-tax revenue 30,552 37,552 31,949 (5,603)

Grants 85,369 84,334 64,329 (20,005)

Program 19,888 16,828 14,923 (1,905)

Dedicated grants 33,630 35,655 30,530 (5,125)

Food security 3,034 3,832 2,682 (1,150)

NAC inflows 11,421 11,080 9,630 (1,450)

Health SWAP 13,729 14,188 10,004 (4,184)

Education SWAp 5,446 6,555 7,191 636

Project Grants 31,851 31,851 18,876 (12,975)

Total expenditure, Net lending and

Direct payments 297,084 309,995 296,195 (13,800)

Total expenditure 294,784 307,695 295,195 (12,500)

Recurrent expenditure 216,907 222,643 230,225 7,582

Wages and salaries 57,748 57,948 58,092 144

Interest on debt 20,127 20,127 22,819 2,692

Foreign 956 956 610 (346)

Domestic 19,171 19,171 22,209 3,038

Goods, services and transfers 110,404 112,840 114,913 2,073

Of which Subventions 11,757 11,757 14,635 2,878

Subsidies 21,229 24,128 22,359 (1,769)

Social Benefits 7,400 7,600 12,042 4,442



10/52

2010/2011Approved

Estimate

2010/11Revised

Estimate

2010/11

Actual

Variance

(Actualminus

Revised)

Development expenditure 77,877 85,052 64,971 (20,081)

Domestically financed projects (Part II) 28,974 31,625 33,284 1,659

Foreign financed projects (Part I) 48,903 53,427 31,687 (21,740)

Net Lending 2,300 2,300 1,000 (1,300)

Overall balance (including grants) (9,967) (13,087) (22,943) (9,856)

Total financing 9,967 13,087 24,756 11,669

Foreign (net) 21,036 24,948 10,719 (14,229)

Borrowing 23,092 27,004 12,693 (14,311)

Program 6,040 5,428 - (5,428)

Project Loans 17,052 21,576 12,811 (8,765)

Amortisation (2,056) (2,056) 1,974 4,030

Domestic borrowing (net) (11,920) (11,861) 14,037 25,898

2.1 Revenues and Grants

In 2010/11 Fiscal Year, Total Revenues and Grants were estimated at K287 billion at the

Approved Estimates stage. This projection included Domestic Revenues amounting to K202

billion and Grants totaling K85 billion. At Mid-Year, these estim ates were revised upwards to

K297 billion with Domestic Revenues rising to K213 billion and Grants falling marginally to

K84billion.

2.1.1 DomesticRevenues

The Approved estimates for domestic revenues comprised K171 billion Ta x Revenues and K30.6

billion Non Tax Revenues. These estimates were revised upwards to K213 billion at Mid-Year



11/52

comprisin

billion w

collection

K1.9 bill

Figure 1

2.1.2 G

Grants in

Grants, K

At Mid-Y

billion P

Overall,

Figure 2

K5.1 bill

fell short

ng K175 bil

was collected

n on Non Ta

lion.

: 2010/11 D

Grants

n 2010/11 Fi

K33.6 billion

Year, Grant

Program Gra

Grants unde

, Project Gr

lion mainly

t by K4.2 bil

llion Tax Re

d implying an

ax Revenues

Domestic Re

iscal Year w

n Dedicated

ts were mar

ants, K35.7

erperformed

rants underp

on account

llion and Pro

evenues and

n under coll

s of K5.6 bi

venue Outt

were projecte

Grants and

rginally revi

billion De

d by K20 bi

erformed by

of underper

ogram Grant

K37.6 billio

ection of K3

llion. The T

urn

ed at K85 b

K31.9 Proje

ised downw

edicated Gra

llion at the

y K13 billio

rformance o

ts underperfo

on Non Tax

3.7 billion. T

Tax Revenue

illion compr

ect Grants at

wards to K84

ants and K3

end of the

on. Dedicated

n Health Se

ormed by K1

Revenues. H

This was on

es slightly ov

rising K19.9

t the Approv

4 billion, co

31.9 billion

financial ye

d Grants un

ector SWAp

1.9 billion.

However, K2

account of u

ver performe

9 billion Pro

ved Budget s

omprising K

n Project Gr

ear. As show

nderperforme

resources w

208.9

under

ed by

ogram

stage.

K16.8

rants.

wn in

ed by

which


Kmillion


12/52

Figure 2

2.2 E

Expendit

Recurren

expenditu

Expendit

Fiscal Ye

on accou

the 2010/

2: 2010/11 P

Expenditure

tures in 2010

nt Expenditu

ures were r

tures and K

ear amounte

unt of reduce

/11 expendit

erformance

e

0/11 Fiscal Y

ures and K

revised upw

K85 billion D

ed to K296 b

ed expenditu

ture outturn

e of Grants

Year were e

K77.9 billion

wards to K

Developmen

billion result

ures in Proje

by different

estimated at

n Developm

K310 billion

nt Expenditu

ing in an un

ect Grants. F

categories.

K297 billio

ment Expend

comprising

ures. Total

nder expendi

Figure 3 bel

on comprisin

ditures. At

g K222.6 b

expenditure

ture of K13.

low highligh

ng K216.9 b

Mid-Year,

billion Recu

e outturn fo

.8 billion, m

hts the patte

illion

these

urrent

or the

mainly

ern of



13/52

Figure 3

2.2.1 R

Total Re

against a

expenditu

and Soci

public se

Agricultu

of retiree

2.2.2 D

Overall,

under ex

projects.

3: 2010/11 E

Recurrent A

ecurrent Exp

an estimate o

ure was mai

ial Benefits.

ervice deliv

ure. Social B

es.

Developmen

Developmen

xpenditure w

Expenditure

Account Exp

penditure to

of K222.6 b

inly recorded

An increas

very sectors

Benefit expen

t Account E

nt Account E

was mainly

by Categor

penditure

o the end of

billion reflec

d in Wages

se in Wages

such as se

nditures incr

Expenditure

Expenditure

on account

ry

f the 2010/11

cting an ove

and Salarie

and Salarie

ecurity relat

reased by K4

e

s posted an

t of delayed

1 Fiscal Yea

r expenditur

s, Goods an

es was as a

ted Instituti

4 billion on

under expen

d disbursem

ar amounted

re of K7.6 b

nd Services,

result of re

ons, Health

account of i

nditure of K

ments in som

d to K230 b

billion. This

Interest Pay

ecruitment in

h, Education

increased nu

K20.1 billion

me donor-fu

illion

over

yment

n key

n and

umber

. The

unded



14/52


15/52

3. THE 2011/12 FISCAL YEARPERFORMANCE

3.1 Introduction

In 2011/12 Fiscal Year, the Budget was formulated against a backdrop of fears of a second wave

of global economic recession arising from the financial crisis in the Euro Zone. The world

economy was projected to grow by 4.4 percent driven by relatively higher growth rates in

emerging and developing economies. In Sub Saharan African region, the economies were

projected to grow by 5.5 per cent driven by high growth rates in oil and mineral rich countries of

the region. In Malawi, the economy was projected to grow by 6.9 percent but could only manage

4.3 percent due to continued economic challenges led by scarcity of foreign exchange, fuels and

donor withdrawal of budget support.

The Budget was also formulated under the assumption that Government would meet all

Recurrent Expenditures from locally generated resources while donor resources would

complement Development Expenditure. It was assumed domestic revenues would perform well

to cover the Recurrent Expenditure and part of the Development Expenditure. Table 2 below

outlines the 2011/12 budget estimates and its outturn.

Table2:2011/12 ApprovedandRevised Budget Performance (K millions)

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2011/12

Outturn

Variance

( Outturn

minus

Revised)

Revenue and Grants 307,710 287,468 260,203 - 27,265

Revenue 242,477 242,477 207,754 - 34,723

Tax revenue 203,504 203,504 180,905 - 22,599

Nontax revenue 38,973 38,973 26,849 - 12,125

Grants 65,233 44,991 52,678 7,687

Program 19,811 - 362


362


16/52

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2011/12

Outturn

Variance

( Outturn

minus

Revised)

Dedicated grants 28,336 29,164 35,116 5,952

Of which:

Food Security 2,545 7,515 7,132 - 383

NAC Inflows 4,812 5,807 8,590 2,783

Health SWAP 10,064 2,100 10,407 8,307

Education SWAP 8,868 13,742 - -13,742

Roads 2,048 - 2,880 2,880

Project Grants 17,086 15,827 17,200 1,373

Total Expenditure, Net lending andDirect Payments 303,724 300,093 328,105 28,011

Total Expenditure 303,724 300,893 328,105 27,211

Recurrent expenditure 233,827 229,099 250,686 21,587

Wages and salaries 66,182 67,916 69,916 1,999

Interest payments 19,795 20,433 20,243 - 190

Domestic 18,671 18,671 18,598 - 73

Foreign 1,124 1,762 1,645 -117

Goods, services and transfers 114,245 106,413 124,043 17,630

Of which: Subventions 13,930 14,730 16,778 2,048

Subsidies 21,606 23,337 24,622 1,284

Social Benefits 12,000 11,000 11,863 863

Development expenditure 69,897 70,195 77,419 7,224

Part II (domestically financed) 40,422 41,979 41,959 - 19

Part I (foreign financed) 29,475 28,216 35,460 7,244Net lending - 800 - - 800

Overall balance (including grants) 3,986 - 12,626 - 67,901 - 55,275

Total financing (net) - 3,986 12,626 70,051 57,425

Foreign (net) 11,378 12,942 15,657 2,715



17/52

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2011/12

Outturn

Variance

( Outturn

minus

Revised)

Borrowing 13,747 15,311 18,384 3,073

Program 1,357 2,921 - - 2,921

Project Loans 12,389 12,389 18,260 5,870

Amortization - 2,369 - 2,369 - 2,726 - 358

Net domestic debt - 15,364 - 316 54,394 54,710


In 2011/12 Fiscal Year, total Revenues and Grants were projected at K307.7 billion comprising

K242.5 billion Domestic Revenues and K65.2 billion Grants. At Mid Year, these estimates were

revised downwards to K287.5 billion comprising K242.5 billion Domestic Revenues and K45

billion Grants.


Total Domestic Revenues are projected to amount to K207.8 billion against a target of

K242.5 billion, reflecting an underperformance of K35 billion. Tax Revenues are

projected at K180.9 billion against a target of K203.5 billion thereby missing the target

by K22.6 billion while Non-Tax Revenues are expected to underperform by K12.1

billion. The underperformance ismainlyattributedtopoor performance of the economy.



18/52

3.2.2 G

Grants in

Grants, K

estimates

and K15

comprisin

Project G

Grants

n 2011/12 Fi

K28.3 billio

s were revis

.8 billion Pr

ng K362 m

Grants repres

iscal Year w

on Dedicated

ed downwar

roject Grant

million Progr

senting an ov

were projecte

d Grants an

rds to K44.9

ts. It is proje

ram Grants,

ver performa

d at K65.2 b

nd K17.1 bi

9 billion com

ected that a

K35.1 billi

ance of K7.7

billion comp

llion Projec

mprising K2

total of K5

ion Dedicate

7 billion.

rising K19.8

ct Grants. A

29.2 billion D

52.7 billion

ed Grants an

8 billion Pro

At Mid Year

Dedicated G

will be rece

nd K17.2 b

ogram

r, the

Grants

eived,

illion


Kmillion

Figure4:2011/12DomesticRevenue and the Likely Outturn


19/52

Figure 5

3.3 E

Total Ex

comprisin

At the M

K229.1 b

outturn i

K250.7

outturn r

Expendit

5: 2011/12 G

Expenditure

xpenditures

ng K233.8 b

Mid Year, t h

billion Recu

s that Total

billion Recu

reflects an o

ture and K7.

Grants Perfo

e

and Net Le

billion Recur

hese expend

urrent Expen

Expenditur

urrent Expe

over expendi

2 billion in t

ormance by

nding in 20

rrent Expend

ditures were

nditures and

es and Net

enditures an

iture of K28

the Developm

Category

11/12 Fisca

ditures and K

e revised do

K70.2 billio

Lending wil

nd K77.4 bi

8 billion com

ment Expen

al Year wer e

K69.9 billion

ownwards to

on Developm

ll amount to

illion Devel

mprising K2

nditure.

e projected a

n Developme

o K300.1 bi

ment Expend

o K328.1 bil

lopment Ex

21.6 billion

at K303.7 b

ent Expendit

illion compr

ditures. Proj

llion, compr

xpenditures.

in the Recu

illion

tures.

rising

ected

rising

This

urrent



20/52

3.4 O

The 2011

opposed

Domestic

tune of K

Overall Bala

1/12 Fiscal Y

to K12.6 bil

c Revenues w

K28billion.

ance and Ne

Year is estim

llion at Mid-

which misse

et Lending

mated to end

-Year. The o

ed the target

with a high

outturnislarg

by K34.7 bi

fiscal deficit

gely explain

illion and inc

t positionof

ned by poor p

creasedexpe

f K67.9 billio

performance

enditures to

on as

e of

a


Kmillion

Figure 66: 2011/12 EExpenditure by Categorry


21/52

4. ESTIMATES OF REVENUES AND EX PENDITURE FOR THE 2012/13 FISCAL

YEAR

4.1 Introduction

The 2012/13 Budget has taken on board the macroeconomic outlook; priorities of the Malawi

Growth and Development Strategy II; and the policy interventions Government is pursuing to

address macroeconomic challenges the country is experiencing. Under the macroeconomic

outlook, the preparation of the Budget has considered prospects in the global, sub regional and

domestic economy. At the global level, growth is projected to drop from 4 percent in 2011 to

about 3.5 percent in 2012. For emerging and developing economies, real GDP is projected to

slow down from 6.3 percent in 2011 to 5.8 percent in 2012 and then rebound to 6 percent in

2012. In the Sub Saharan Africa re gion, growth is projected at 5.1 percent in 2011 and 5.4 in

2012 despite a slowdown in South Africa due in part to the slowdown in the Euro zone. The

outlook for the Malawi economy is that growth will be maintained at 4.3 per cent in 2012 as the

economy recovers from adverse conditions in 2011 but expected to rebound to 5.7 percent in

2013.



22/52

Table3:2012/13BudgetEstimates(K million)

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2011/12

Outturn

2012/13

estimate

Revenue and Grants 307,710 287,468 260,203 394,472

Revenue 242,477 242,477 207,754 270,392

Tax revenue 203,504 203,504 180,905 236,459

Nontax revenue 38,973 38,973 26,849 33,932

Grants 65,233 44,991 52,678 124,079

Program 19,811 - 362 53,864

Dedicated grants 28,336 29,164 35,116 47,617

Of which:

Food Security 2,545 7,515 7,132 8,577

NACInflows 4,812 5,807 8,590 12,229

Health SWAP 10,064 2,100 10,407 7,771

Education SWAP 8,868 13,742 - 15,053

Roads 2,048 - 2,880 3,996

ProjectGrants 17,086 15,827 17,200 22,598

Total Expenditure, Net lending and

Direct Payments 303,724 300,093 328,105 408,390

Total Expenditure 303,724 300,893 328,105 408,390Recurrent expenditure 233,827 229,099 250,686 332,139

Wages and salaries 66,182 67,916 69,916 86,822

Interest payments 19,795 20,433 20,243 28,753

Domestic 18,671 18,671 18,598 25,210

Foreign 1,124 1,762 1,645 3,543

Goods,servicesand transfers 114,245 106,413 124,043 156,982

Of which: Subventions 13,930 14,730 16,778 17,013

Subsidies 21,606 23,337 24,622 40,884

Social Benefits (Pension and

Gratuity) 12,000 11,000 11,863 18,698Developmentexpenditure 69,897 70,195 77,419 76,251

PartII (domesticallyfinanced) 40,422 41,979 41,959 37,655

Part I (foreign financed) 29,475 28,216 35,460 38,596

Net lending - 800 - -

Overall balance (including grants) 3,986 - 12,626 - 67,901 - 13,470

Total financing (net) - 3,986 12,626 70,051



23/52

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2011/12

Outturn

2012/13

estimate

Foreign (net) 11,378 12,942 15,657

Borrowing 13,747 15,311 18,384 19,010Program 1,357 2,921 - 3,037

ProjectLoans 12,389 12,389 18,260 15,973

Amortization - 2,369 - 2,369 - 2,726 - 5,523

Net domesticdebt -15,364 -316 54,394 -


Total Revenues and Grants are projected at K394.5 billion in 2012/13 Fiscal Year of which

K270.4 billion is for Domestic revenues and K124.1 billion is for Grants.


Domestic Revenues in 2012/13 Fiscal Year are expected to amount to K270.4 billion comprising

K236.5billion TaxRevenuesandK33.9billionNon TaxRevenues.

4.2.2 Grantsin2012/13Fiscal Year

Grants in 2012/13 are projected to be K124.1 billion comprising K53.9 billion Program Grants,

K47.6 billion Dedicated Grants and K22.6 billion Projects Grants. Comparing with the 2011/12

Fiscal Year, Grants in 2012/13 ar e significantly up by K58.8 billion.

4.3 ExpenditureIn 2012/13 Fiscal Year, total Expe nditures and Net Lending are projected at K408.4 billion of

which Recurrent Expenditures are K332.1 billion while Development Expenditures are K76.3

billion.



24/52

4.3.1 Recurrent Expenditure

Recurrent Expenditures are projected to increase in the 2012/13 Financial Year. Wages and

salaries are expected to increase from K67.9 billion to K86.8 billion in 2012/13. The increase is

on account of the restructuring of salaries and recruitments in frontline service delivery areas of

Education, Agriculture, Health and Policing. Interest Payments are also projected to increase to

K28.8 billion because of the interest and exchange rate adjustment. Expenditures on Goods,

Services and Transfers are projected at K156.9 billion. The main driver for the increase is the

effectoftheexchangerateadjustment on prices of goods and services.

Expenditures on Subsidies are projected at K40.9 billion. The increased expenditure is mainly

driven by two main factors. Firstly, Government has planned to increase the number of

beneficiaries under the Farm Input Subsidy Programme from 1.4 million to 1.5 million farm

families which has also necessitated the increase in tonnage from 140,000 to 150,000 metric

tonnes. Secondly, the devaluation of the Malawi Kwacha has affected the cost of fertilizer and

maize seed purchase.

Government continues to significantly increase its support to Subvented Organizations especially

those that provide social services such as the Public Universities and other education-related

Institutions. Going forward, Government intends to review revenue sources for such

Organizations in order to enhance their revenue collection efforts. Annex 4 shows the allocations

to various Subvented Organizations between2011/12and2014/15Financial Years.

4.3.1.1 TransferstoLocalGovernmentCouncils

Government continues to transfer resources to Local Government Councils in line with the

Decentralization policy. As indicated in Table 4 be low, a total of K18.1billion is projected to be

transferred to Councils. Health and Education sectors have been allocated the largest share.



25/52

Table4: Transfer toCouncilsbySector

Sector

2010/11

Approved

Estimate

2011/12

Approved

Estimate

2011/12 Revised

Estimate2012/13 Draft

Estimates

Agricultural Sector 517,102,666 517,102,666 517,102,666 517,102,666

Education Sector 1,535,220,085 2,646,078,085 3,420,114,085 5,691,994,722

Of which teaching and learning

materials - 400,000,000 400,000,000 434,000,000

Of which double-shifting

allowances 250,000,000 250,000,000 271,250,000

Of which advisory services 460,000,000 460,000,000 499,100,000

Health Sector 9,172,388,280 9,992,388,280 9,486,943,880 9,076,916,445

Of which - drugs -

General Resource Fund 566,314,567 1,132,629,134 1,132,629,134 1,152,629,134

Constituency Development

Fund 579,000,000 772,000,000 772,000,000 772,000,000

Housing 35,159,220 35,159,220 35,159,220 35,159,220

Trade 33,970,669 33,970,669 33,970,669 33,970,669

Water 33,478,961 33,478,961 33,478,961 33,478,961

Gender 63,999,339 127,120,096 127,120,096 127,120,096

Environment 51,897,175 51,897,175 51,897,175 51,897,175

Forestry 35,333,571 35,333,571 35,333,571 35,333,571

Fisheries 70,330,959 70,330,959 70,330,959 70,330,959

OPC-NRB 38,534,377 38,534,377 38,534,377 38,534,377

Labour 30,271,235 30,271,235 30,271,235 30,271,235

Rehabilitation of City Roads

/ Infrastructure Development

Fund 360,000,000 360,000,000 360,000,000 360,000,000

Immigration 30,000,000 30,000,000 30,000,000 30,000,000

Irrigation 84,000,000 84,000,000 84,000,000 84,000,000



26/52

Sector

2010/11

Approved

Estimate

2011/12

Approved

Estimate

2011/12 Revised

Estimate2012/13 Draft

Estimates

Total 13,237,001,104 15,990,294,429 16,258,886,029 18,140,739,231

OfWhich Leave Grants 638,858,000 638,858,000 644,709,931

4.3.2 Development Expenditure

As shown in Table 3, Development Expenditures are projected at K76.3 billion of which K38.6

billion is from Cooperating Partners while K37.7billionisfrom Domestic Revenues.

4.4 OverallBalance

The 2012/13 Financial Year is estimated to end withafiscaldeficit positionofK13.5billion.

This is largely explained by the gap between the projected Revenues and Expenditures.



27/52

5. Malawi Growth and Development Strategy II and the National Budget

5.1 Introduction

The Malawi Growth and Development Strategy (MGDS) remains the guiding strategy for the

Malawi Government in its effort to improve the social-economic well being of Malawians. The

Strategy sets out Governments priority areas for growth and investments that will enable the

country to achieve the Millennium Development Goals in the medium term and the vision and

aspirations of Malawians stipulated in the Vision 2020 in the long-run. The key priority areas

thathave beenisolatedareasfollows:

Agriculture and Food Security;

Transport Infrastructure;

Energy,IndustrialDevelopment,Miningand Tourism;

Education, Science and Technology;

PublicHealth,Sanitation,Malaria and HIV/AIDS Management;

IntegratedRuralDevelopment;

Green Belt Irrigation and Water Development;

Child Development, Youth Development and Empowerment; and

ClimateChange,NaturalResourcesandEnvironmentalManagement.

5.2 The Linkage between MGDS II and the National Budget

The 2012/13 Budget is aligned to the priorities of the Malawi Growth and Development Strategy

II. About 85 percent of the total budget has been allocated to MGDS Key Priority Areas. The

Tablebelow showstheprojectedallocationstovariouskeyareas.



28/52

Table5:MGDS Allocationsin 2012/13Estimates(K million)

Sector

2011/12

Approved

Estimates

2011/12

Revised

Estimates

2012/13

Estimates

2013/14

Estimates

2014/15

Estimates

Agriculture and FoodSecurity

39,202 41,041 66,509 67,259 62,575

Transport Infrastructure 34,675 30,387 35,031 40,406 31,278

Energy, Industrial

Development, Miningand Tourism

10,053 9,046 9,227 12,421 4,570

Education, Science andTechnology 55,801 61,187 76,407 74,564 75,827

Public Health,Sanitation, Malaria andHIV/AIDS Management

42,775 37,425 49,145 34,446 33,228

Integrated RuralDevelopment

12,769 16,661 15,314 7,423 5,043

Green Belt Irrigation andWater Development

7,388 7,940 4,748 4,537 2,139

Child Development,Youth DevelopmentEmpowerment

3,186 4,249 11,747 2,610 2,243

Climate Change, NaturalResources andEnvironmental

Management

2,830 2,917 1,857 2,650 2,616

Other 94,946 99,075 53,340 78,014 100,062

In the 2012/13 Budget Estimates, Education, Science and Technology priority Area is projected to

receive K76 billion as compared to K59.8 billion in 2011/12 Revised Budget representing a 24

percent allocation of the total resource envelope. This shows that the Education sector has been

allocated more than the other MGDS Key Priority Areas and it will enable the sector implement

planned activities such as the construction of 2,000 classrooms, 1,000 teacher houses and 3

teachers training colleges, rehabilitation of secondary schools and technical colleges just to

mentionafew.

The Agriculture and Food Security area has been allocated K66.5 billion as compared to K36

billion in 2011/12 Revised Budget. This represents 21 percent of the total 2012/13 Budget

Estimates which is an increase from the 12 percent allocated in 2011/12 Revised Budget. This



29/52

means that in 2012/13 Budget Estimates, Agriculture and Food Security is the second largest

area in terms of resource allocation. Of the estimated allocation for 2012/13 Financial Year,

Government plans to provide K40.6 billion for subsidized maize seed and fertilizer to

smallholder farmers under the Farm Input Subsidy Programme. It is estimated that the number of

beneficiaries will increase from 1.4 million in 2011/12 to 1.5 million in 2012/13 Financial Year.

Public Health, Sanitation, Malaria and HIV/AIDs Management has been allocated K49.1 billion

in the budget representing 15 percent of the resource envelope. Of these resources, K27.6 billion

is for the Ministry of Health while Local Government Councils have been allocated K9 billion.

Development expenditure includes: construction of District Hospitals, purchase of medical

equipment as well as rehabilitation of hospitals among other projects.

Table6:MGDS Allocationsas a Percentage in 2012/13 Estimates

Sector2011/12

Approved

2011/12

Revised

2012/13

Projections

2013/14

Projections

2014/15

Projections

Agriculture and Food Security 13% 13% 21% 21% 20%

Transport Infrastructure 11% 10% 11% 12% 10%

Energy, Industrial Development,Mining and Tourism

3% 3% 3% 4% 1%

Education, Science and Technology 18% 20% 24% 23% 24%

Public Health, Sanitation, Malaria andHIV/AIDS Management

14% 12% 15% 11% 10%

Integrated Rural Development 4% 5% 5% 2% 2%

Green Belt Irrigation and WaterDevelopment

2% 3% 1% 1% 1%

Child Development, YouthDevelopment Empowerment 1% 1% 4% 1% 1%

Climate Change, Natural Resources andEnvironmental Management

1% 1% 1% 1% 1%

Other 31% 32% 16% 24% 31%

Total 100% 100% 100% 100% 100%



30/52

FinancialStatement Annex1: Vote Allocation Summary (K Millions)

MINISTRY/DEPARTMENT

20 11/12

Approved

Estimate

2011/12

Revised

Estimate

2012/13

Estimates

2013/14

Estimate

2014/15

Estimate

PE+ORT+Development

010- The Presidency43.31 43.31 44.61 45.95 47.33

020 - Compensations and Refunds7,202.62 6,029.03 17,114.97 19,724.36 15,583.92

030 - Pensions and Gratuities12,000.00 11,000.00 18,698.42 17,938.58 20,584.72

040 - Public Debt Charges19,794.93 20,432.60 28,752.80 31,345.07 31,382.95

050 - State Residences1,567.78 1,620.07

1,842.79 1,648.00 1,652.60

060 - National Audit Office456.12 500.32 402.13 385.72 371.68

070 - The Judiciary1,927.27 1,929.71 2,428.36 2,493.23 1,695.62

080 - National Assembly3,559.58 3,559.58 3,832.58 3,560.41 3,411.50

090 - Office of the President and Cabinet3,519.40 3,978.09 4,279.48 6,858.18 5,611.45

093 - Department of Human Resources Managementand Development 3,933.80 614.61 10,786.01 27,971.63 44,904.32

094 - Nutrition, HIV and AIDS and National AIDSCommission 5,599.70 6,460.22 12,908.68 4,850.47 3,530.44

097 - Public Service Commission163.43 164.72 174.83 168.69 163.50

099 - Directorate of Public Procurement234.43 234.43 226.04 215.11 205.61

100 - Defence763.34 762.22 1,015.47 1,979.48 3,523.07

101 - Malawi Defence Force7,008.63 7,180.67 7,608.92 8,196.10 7,293.03

110 - Ministry of Economic Planning &

Development 1,591.87 1,575.97 653.58 580.70 353.47

111 - National Statistical Office269.18 273.08 416.65 330.33 325.96

120 - Local Government and Rural Development5,372.08 5,357.56 7,354.45 2,949.40 1,865.85

121 - National Local Government Finance

Committee 1,743.75 2,144.46 3,711. 77 1,820.31 812.75

130 - Lands and Housing4,478.08 4,673.06 7,148.32 7,248.91 5,340.60

180 - Youth and Sports827.74 795.22 448.67 691.52 316.63



31/52

MINISTRY/DEPARTMENT

20 11/12

Approved

Estimate

2011/12

Revised

Estimate

2012/13

Estimates

2013/14

Estimate

2014/15

Estimate

190 - Agriculture and Food Security37,715.02 40,153.68 65,021.43 58,242.84 53,811.65

200 - Disability and Elderly Affairs301.73 288.18 293.09 201.05 213.09

210 - Water Development and Irrigation7,270.42 7,822.29 4,630.54 4,422.42 2,028.02

240 - Office of the Vice President128.85 173.52 300.93 322.25 301.79

250 - Education, Science and Technology39,792.62 43,590.44 54,682.32 52,917.48 53,658.06

260 - Foreign Affairs and International Cooperation4,665.23 4,438.30 6,320.07 5,656.14 5,462.17

270 - Ministry of Finance3,832.71 2,073.16 2,913.33 1,141.40 1,050.36

271 - Accountant General's Department5,255.92 4,918.85 5,345.42 4,965.87 4,249.33

272 - Local Development Fund4,880.84 8,387.31 3,475.54 1,880.93 1,592.75

273 - Malawi Revenue Authority6,240.00 6,240.00 7,112. 00 7,247.94 7,986.84

274 - Road Fund Administration10,970.39 7,663.48 11,010.00 12,111.00 13,322.10

275 - Subvented Organisations13,930.30 14,730.30 17,013.39 17,435.44 19,039.09

278 - Unforseen Expenditure826.01 576.00 1,480.00 800.00 720.00

279 - Financial Intelligence Unit147.54 143.81 161.23 156.94 153.44

321 - Ministry of Health26,766.46 21,061.70 26,743.64 22,772.81 22,328.26

320 - Gender, Children and Social Welfare1,675.87 1,683.50 10,033.33 1,047.20 1,049.12

330 - Information915.12 728.92 1,124.65 1,139.72 586.35

340 - Home Affairs559.02 561.36 766.74 768.94 1,310.87

341 Malawi Police Service

5,376.61 6,226.86 5,905.85 6,106.02 6,044.00

342 - Malawi Prisons Service2,493.14 2,447.25 2,041.68 5,400.31 5,212.96

343 - Immigration4,118.87 2,920.79 6,345. 28 1,047.35 604.75

350 - Justice435.64 368.55 375.86 347.46 322.17

351 - Director of Public Prosecution and State

Advocate 392.16 439.30 197.91 187.22 177.87



32/52

MINISTRY/DEPARTMENT

20 11/12

Approved

Estimate

2011/12

Revised

Estimate

2012/13

Estimates

2013/14

Estimate

2014/15

Estimate

352 - Registrar General101.68 91.96 120.11 111.71 104.26

353 - Administrator General114.62 93.00 116.10 102.35 96.40

354 - Legal Aid117.67 95.28 122.61 109.71 104.57

360 - Tourism and Culture2,149.53 2,168.64 2,728.26 2,366.89 984.19

370 - Labour438.79 391.77 574.96 443.05 475.17

390 - Industry and Trade2,866.17 2,825.47 1,696.77 2,251.49 1,493.65

400 - Transport and Public Works2,201.58 2,325.69 2,576.96 2,919.98 2,216.18

420 - National Roads Authority13,730.26 13,730.26 12,150.90 15,029.30 7,885.05

430 - Human Rights Commission280.14 274.44 287.38 290.99 295.21

460 - Electoral Commission501.96 629.50 919.10 5,415.01 519.16

470 - Energy and Mining2,742.54 2,829.48 711. 31 6,334.78 611.91

471 - Geological Surveys135.80 126.77 169.05 159.34 150.83

472 - Mines Department144.43 128.13 166.62 156.11 146.83

480 - Environment and Climate Change- - 1,770.07 2,531.28 2,509.68

510 - Anti Corruption Bureau1,127.79 1,149.15 983.70 956.79 934.18

550 - Office of the Ombudsman118.33 107.35 168.00 163.45 159.60

560 - Law Commission215.13 202.16 217.27 357.50 363.55

Councils15,990.29 16,258.89 18,140.74 16,193.27 14,704.04



33/52

FinancialStatement Annex2:Personal Emoluments (K Millions)

MINISTRY/DEPARTMENT

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2012/13

Estimates

2013/14

Estimate

20 14/15

Estimate

PE

010- The Presidency43.31 43.31 44.61 45.95 47.33

050 - State Residences261.48 313.78 538.57 552.33 566.50

060 - National Audit Office154.15 183.34 183.15 188.65 194.31

070 - The Judiciary985.39 1,024.81 1,056.78 1,000.83 1,030.86

080 - National Assembly1,603.86 1,508.72 1,646.86 1,593.26 1,641.06

090 - Office of the President and Cabinet894.79 1,019.09 1,035.83 1,066.91 1,098.91

093 - Department of Human Resource

Management and Development3,691.14 406.07 10,562.56 27,756.03 44,700.27

094 - Nutrition, HIV and AIDS and NationalAIDS Commission

50.68 76.20 71.11 55.75 57.43

097 - Public Service Commission75.85 88.95 87.25 89.87 92.57

099 - Directorate of Public Procurement98.15 98.15 89.76 92.46 95.23

100 - Defence40.11 47.73 44.97 46.32 47.71

101 - Malawi Defence Force3,778.09 3,650.13 4,178.38 4,292.28 4,409.59

110 - Ministry of Economic Planning andDevelopment

117.25 125.40 133.58 127.29 131.10

111 - National Statistical Office104.73 129.13 127.48 131.30 135.24

120 - Local Government and Rural Development 966.17 1,001.88 910.53 937.85 965.98

121 - National Local Government FinanceCommittee

473.63 553.86 556.17 572.86 590.04

130 - Lands and Housing435.41 496.96 497.86 512.79 528.18

180 - Youth and Sports115.01 128.59 136.34 140.43 144.64

190 - Agriculture and Food Security3,123.11 3,583.87 3,965. 85 4,069.83 4,176.92

200 - Disability and Elderly Affairs50.25 57.65 53.40 54.34 55.88

210 - Water Development and Irrigation390.96 439.75 466.10 456.40 470.09

240 - Office of the Vice President 48.85 93.97 87.84 90.48 93.19

250 - Education, Science and Technology25,273.51 28,478.13 32,646.48 35,646.48 38,646.48

260 - Foreign Affairs and InternationalCooperation

1,865.03 1,869.03 2,857.87 2,933.85 3,012.12

270 - Ministry of Finance240.48 240.48 235.44 243.44 254.69

271 - Accountant General's Department151.04 187.58 196.78 202.68 208.76

279 - Financial Intelligence Unit77.39 86.39 91.07 93.81 96.62



34/52

MINISTRY/DEPARTMENT

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2012/13

Estimates

2013/14

Estimate

20 14/15

Estimate

310 - Ministry of Health11,898.91 12,576.66 13,836.67 14,251.77 14,679.33

320 - Gender, Children and Social Welfare387.63 420.34 415.72 426.00 438.78

330 - Information and Civic Education192.67 237.31 263.87 271.15 278.64

340 - Home Affairs49.93 59.55 53.78 55.40 57.06

341 Malawi Police Service3,341.64 3,753.21 3,973.88 4,090.25 4,210.11

342 - Malawi Prisons Service449.69 535.68 507.15 522.36 538.03

343 - Immigration165.19 163.19 165.31 170.27 175.38

350 - Justice73.59 66.62 70.61 72.73 74.91

351 - Director of Public Prosecution and State

Advocate 64.23 70.01 69.99 72.09 74.25352 - Registrar General

24.38 26.94 27.81 28.64 29.50

353 - Administrator General37.53 30.52 32.00 32.96 33.95

354 - Legal Aid45.61 37.63 43.56 44.86 46.21

360 - Tourism Wildlife and Culture324.00 384.86 402.81 414.90 427.35

370 - Labour172.96 164.39 189.13 194.80 200.65

390 - Industry and Trade165.24 160.22 158.89 163.66 168.57

400 - Transport and Public Works530.90 609.73 636.28 655.36 675.03

430 - Human Rights Commission241.56 241.56 248.80 256.27 263.95

460 - Electoral Commission330.94 330.94 340.87 351.09 361.63

470 - Energy and Mining1,293.51 1,413.46 119.62 294.69 302.64


472 - Mines Department45.11 43.92 47.30 48.72 50.18

480 - Environment and Climate Change- - 1,321.99 1,189.27 1,224.95

510 - Anti Corruption Bureau364.70 421.31 415.10 427.55 440.38

550 - Office of the Ombudsman 54.80 53.62 104.47 106.28 108.14

560 - Law Commission126.94 129.06 129.08 132.95 136.94

Councils638.86 638.86 644.71 644.71 644.71



35/52

FinancialStatement Annex3:Other Recurrent Transactions(K Million)

MINISTRY/DEPARTMENT

20 11/12

Approved

Estimate

20 11/12

Revised

Estimate

20 12/13

Estimates

20 13/14

Estimate

20 14/15

Estimate

ORT020 - Compensations and Refunds7,202.62 6,029.03 17,114. 97 19,724.36 15,583.92

030 - Pensions and Gratuities

12,000.00 11,000.00 18,698.42 17,938.58 20,584.72

040 - Public Debt Charges

19,794.93 20,432.60 28,752.80 31,345.07 31,382.95

050 - State Residences

1,006.30 1,006.30 1,106.30 1,095.67 1,086.10

060 - National Audit Office

201.97 216.97 218.97 197.08 177.37

070 - The Judiciary

446.87 379.90 698.87 628.99 566.09

080 - National Assembly

1,885.72 1,980.86 2,185.72 1,967.15 1,770.44

090 - Office of the President and Cabinet

1,336.57 1,662.56 1,713.65 2,107.43 2,144.03

093 - Department of Public Service Management

178.45 144.32 178.45 165.61 154.05

094 - Nutrition, HIV and AIDS and NationalAIDS Commission

5,188.62 6,194.02 12,837.57 2,610.87 1,553.68

097 - Public Service Commission

87.57 75.77 87.57 78.82 70.94

099 - Directorate of Public Procurement

136.28 136.28 136.28 122.65 110.38100 - Ministry of Defence

67.87 59.13 79.87 71.88 64.69

101 - Malawi Defence Force

3,200.54 3,500.54 3,430.54 3,203.82 2,883.44

110 - Ministry of Economic Planning and

Development142.34 103.28 212.34 173.10 155.79

111 - National Statistical Office

92.38 71.87 92.38 83.14 74.83

120 - Local Government and Rural Development

258.55 208.33 329.55 227.41 206.49

121 - National Local Government FinanceCommittee1,270.12 1,590.61 3,155.60 1,247.45 222.71

130 Lands and Housing

2,959.68 3,093.10 5,785.46 3,856.91 3,471.22

180 - Youth and Sports

212.33 166.23 212.33 191.10 171.99

190 - Agriculture and Food Security

23,738.57 25,716.47 46,742.76 42,989.72 42,707.29

200 - Disability and Elderly Affairs

146.49 125.54 158.94 149.72 160.21



36/52

MINISTRY/DEPARTMENT

20 11/12

Approved

Estimate

20 11/12

Revised

Estimate

20 12/13

Estimates

20 13/14

Estimate

20 14/15

Estimate

210 - Water Development and Irrigation

135.21 85.96 135.21 121.69 109.52

240 - Office of the Vice President

80.00 79.55 213.08 231.77 208.60

250 - Education, Science and Technology

7,978.84 8,527.02 12,537.59 11,283.83 10,155.45

260 - Foreign Affairs and InternationalCooperation

2,400.20 2,169.27 3,067.20 2,722.28 2,450.06

270 - Ministry of Finance

1,723.89 1,223.17 2,073.89 897.96 795.66

271 - Accountant General's Department

4,754.87 4,381.27 4,554.87 4,056.19 4,040.57

273 - Malawi Revenue Authority

6,240.00 6,240.00 7,112. 00 7,247.94 7,986.84274 - Roads Fund Administration

10,970.39 7,663.48 11,010.00 12,111.00 13,322.10

275 - Subvented Organisations

13,785.44 14,730.30 17,013.39 17,435.44 19,039.09

278 - Unforseen Expenditure

826.00 576.00 1,480.00 800.00 720.00

279 - Financial Intelligence Unit

70.15 57.43 70.15 63.14 56.82

310 - Ministry of Health

9,516.99 6,139.31 9,134.48 8,221.03 7,398.93320 - Gender, Children and Social Welfare

169.53 144.46 169.53 308.59 277.73

330 - Information

498.36 475.92 360.78 358.57 307.71

340 - Home Affairs

64.09 56.81 94.09 84.68 76.21

341 - Malawi Police Service

2,034.97 2,473.65 1,931.97 2,015.78 1,833.90

342 - Malawi Prisons Services

1,443.45 1,311.57 1,024. 53 1,177.95 1,107.93

343 - Immigration

3,953.68 2,757.60 6,179.96 877.07 429.37

350 - Justice305.25 245.13 305.25 274.73 247.25

351 - Director of Public Prosecution and StateAdvocate

327.93 369.30 127.93 115.13 103.62

352 - Registrar General

77.30 65.03 92.30 83.07 74.76

353 - Administrator General

77.10 62.48 84.10 69.39 62.45

354 - Legal Aid

72.06 57.65 79.06 64.85 58.37



37/52

MINISTRY/DEPARTMENT

20 11/12

Approved

Estimate

20 11/12

Revised

Estimate

20 12/13

Estimates

20 13/14

Estimate

20 14/15

Estimate

360 - Tourism and Culture

375.53 333.78 390.53 351.47 316.33

370 - Labour185.84 147.39 185.84 167.25 150.53

390 - Industry and Trade

316.81 281.14 316.81 285.13 256.62

400 - Transport and Public Works

760.68 647.96 760.68 684.61 616.15

430 - Human Rights Commission

38.58 32.89 38.58 34.72 31.25

460 - Electoral Commission

171.02 298.56 578.23 5,063.92 157.53

470 - Energy and Mining

427.57 364.55 370.09 338.08 309.28


472 - Mines Department

89.32 74.21 119.32 107.39 96.65

480 - Environment and Climate Change

- - 343.08 353.37 363.97

510 - Anti Corruption Bureau

317.28 282.02 393.68 354.31 318.88

550 - Office of the Ombudsman

63.53 53.73 63.53 57.17 51.46

560 - Law Commission

88.19 73.09 88.19 79.37 71.44

Councils

15,351.44 15,620 18,140.74 16,193.27 14,704.04



38/52

FinancialStatement Annex4: SubventedOrganization AllocationSummary (K million)

Category

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2012/13

Estimates

2013/14

Estimates

2014/15

Estimates

University of Malawi

7,407 8,107 6,062.95 6,123.58 6,184.82

Malawi Institute ofEducation

274 374 674.38 331.12 334.44

National Library Services

183 183 230.00 232.30 234.62

National UnescoCommission

74 74 93.70 88.68 89.37

Malawi National

Examination Board

1,100 1,100 1,500.00 1,515.00 1,530.15

Malawi Council for theHandicapped

224 224 223.69 202.00 204.02

Malawi National Council ofSports

520 520 520.00 525.20 530.45

Small and MediumEntreprise Board

168 168 168.31 151.50 153.02

Health Service RegulatoryAuthority

100 100 100.00 90.90 91.81

National Herbarium andBotanic Gardens

146 146 165.70 167.35 169.03

Scholarship Fund

420 420 549.84 549.84 549.84

National Youth Council ofMalawi

35 35 35.42 30.30 30.60

Mzuzu University

1,500 1,500 1,500.00 1,315.00 1,818.15

Kachere RehabilitationCentre

92 92 92.41 80.80 81.61

MalawiInvestment andTrade Centre

197 197 300.00 303.00 306.03

Malawi BroadcastingCorporation

570 5701,000.00 1,910.00 2,879.10

National Commission ofScience and Technology

250 250 227.00 229.27 231.56



39/52

Category

2011/12

Approved

Estimate

2011/12

Revised

Estimate

2012/13

Estimates

2013/14

Estimates

2014/15

Estimates

Secretariat of the PublicUniversities Working

Committeee

120 120 120.00 121.20 122.41

Lilongwe University ofAgriculture and Natural

Resources

450 450 2,850.00 2,878.50 2,907.29

Malawi University ofScience and Technology

- - 500.00 500.00 500.00

Malawi Industrial Research

and Technology

100 100 100.00 89.89 90.79



40/52

FinancialStatement Annex5:RevenueOverview(K)

TYPE OF TAX

2010/11

Approved

Estimate

2010/11

Outturn

2011/12

Approved

Estimate

2011/12 Likely

Outurn

2012/13

Estimates

1. PAYE 36,910,271,583 40,620,472,830 42,775,376,688 43,154,402,560 53,155,031,201

2. COMPANY TAX

a. Company Assessment 6,842,711,080 5,775,695,235 7,936,998,976 4,634,929,753 5,709,185,620

b. Provisional Tax 18,031,379,981 15,169,262,295 19,303,576,979 22,234,913,468 27,388,621,495

3. WITHHOLDING

TAX 9,936,320,498 16,794,054,895 11,680,101,418 16,374,119,016 20,168,992,213

4. IMPORT DUTY 18,227,757,867 17,294,208,168 21,806,037,478 17,602,025,945 31,296,266,360

5. VAT

a. Import VAT 28,681,676,744 27,443,983,158 35,212,202,312 28,608,773,082 34,819,000,000

b. Domestic VAT 27,920,013,067 27,175,564,721 34,521,589,467 30,398,290,856 37,443,206,221

6. MISCELLANEOUS

DUTIES 205,000,000 329,933,954 225,641,727 358,238,251 440,544,822

7. EXCISE DUTIES

a. Import Excise 19,525,943,891 17,547,269,702 23,835,442,479 12,941,839,776 19,726,002,404

b. Local Excise 7,488,292,230 7,802,639,460 9,242,709,920 7,848,878,760 9,667,853,450

8. OTHER TAXES

a. Fringe Benefit 2,717,758,553 1,775,521,402 3,191,115,990 2,282,255,877 2,810,890,505

b. Non-Resident Tax 941,992,842 1,608,887,201 1,167,795,476 1,242,749,588 1,531,051,448

c. Penalties 100,000,000 207,064,301 120,092,637 132,527,591 164,335,935

d. Dividend Tax 638,002,687 1,644,891,686 638,002,687 1,289,422,129 1,595,362,952

e.Turnover tax - 3,391,367 - 5,998,500 7,388,671

9. COLLECTION OF

ARREARS 308,956,268 787,251

10. PREPAYMENTS (51,729,169)



41/52

TYPE OF TAX

2010/11

Approved

Estimate

2010/11

Outturn

2011/12

Approved

Estimate

2011/12 Likely

Outurn

2012/13

Estimates

11. COMMISSION

CHARGES

12. TAX

ADJUSTMENTS

TOTAL PROJECTIONS 178,167,121,023 181,501,796,643 211,656,684,233 189,058,423,231 245,923,733,298

Tax Refunds 7,000,000,000 4,527,411,715 8,152,400, 000 8,152, 400, 000 9,464, 836,252

Total Tax (Net) 171,167,121,023 176,974,384,928 203,504,284,233 180,906,023,231 236,458,897,046

Departmental Reciepts 9,263,000,000 12,959,150,771 13,300,426,131 9,567,048,127 11,857,000,000

Road levy 9,581,125,000 7,775,356,540 11,688,524,568 6,384,731,625 11,009,999,985

Safety Net levy 5,625,000,000 6,122,260,653 6,862,236,327 4,017,346,272 -

Rural Electrifciaction

Levy 4,283,288,930 3,546,597,814 3,225,411,573 3,525,956,632 7,882,244,984

Storage Levy 601,574,066 1,700,000,000 1,157,156,884 1,844,999,996

Parastatal Dividends 1,800,000,000 944,306,900 2,195,915,350 2,195,915,350 1,338,000,000

Total Non Tax 30,552,413,930 31,949,246,742 38,972,513,949 26,848,154,891 33,932,244,965

Domestic Revenue(NET) 201,719,534,953 208,923,631,671 242,476,798,182 207,754,178,122 270,391,142,011



42/52

FinancialStatement Annex6:Summary of Off-Budget Support to Malawi

OFF-BUDGET SUPPORT TOMALAWI JULY 2012 TO JUNE 2013

Introduction

Off-Budget support is defined, as project support from development partners whose finances are

not directly managed by the Government. In Malawi, a significant proportion of donor support

forms part of Off-Budget support. When Development Partners are providing project support to

theGovernmentof Malawi,theyengageGovernmentindifferentformsasoutlinedbelow:

a) The Government directly manages all project activities and implementation, as well as

directlymanagingallfinancingissues.

b) The Government directly manages project implementation and procurements, but not the

payments,whicharemadebytheDevelopmentPartneragency.

c) The Government manages only the project implementation, while procurement and

paymentsaremanagedbytheDevelopmentPartnerorganization.

d) The Government manages neither project implementation nor project financing, which

are managed by a Non-Governmental Organization (NGO) or by the donor organization

itself.

Support to Malawi is categorized under Off-Budget if it falls under category b, c and d. Since

Off-Budget support partially uses or does not use country systems at all, it violets the AidEffectiveness principles of the Paris Declaration, 2005; the Accra Agenda for Action, 2008; and

the Busan Outcome Document (the Global Partnership for Effective Development Cooperation,

2011). In all these global agreements, the use of country systems by development partners in the

delivery and management of aid is regarded as a best practice in development cooperation. To

this effect, Government and Development Partners should collaborate to increase support

delivered through government systems and reduce Off-budget support without necessarily

reducing the volume of resources at the same time maintaining the same level of accountability.

The Government must work to strengthen the systems and Development Partners must support

the initiative and use the systems as a first option.

The proportion of Off-Budget support to Malawi remains significant. Out of a total of MK117

billion in direct project support expected in 2012/13 Financial Year, only MK39 billion will pass

through Government auditing and accounting systems. The remaining MK78 billion will be

delivered outside Government systems. Out of the MK78 billion, MK14 billion is expected to be

channeled through NGOs in Malawi and a smaller proportion will be managed by the

Development Partners themselves. However, it should be noted here that the volume of extra-

budgetary support expected in 2012/13 Financial Year might be more than presented here since

projectedsupportforseveralprojectshasnot beenprovidedbyDevelopmentPartners.



43/52

DataCollection

The data presented here was collected through the Commonwealth Debt Recording and

Management System (CS-DRMS) and the Aid Management Platform (AMP) which are fed with

aid data from Development Partners who report to the Ministry of Finance. Since extra-budgetary support is funded outside Government financial management systems, the amounts are

difficult to verify. Their accuracy is dependent on the compliance of Development Partners in

submitting accurate projections to the Ministry of Finance. The tables below provide a summary

and detailed breakdown of extra-budgetary support expected from Malawis Development

Partnersin2012/13Financial Year.

Summary Table of Direct Project Suppo rtfromDevelopmentPartners

2012/13FYProj.

I) DONOR SUPPORT TO GOVERNMENT AGENCIES

ON BUDGET (PART I DEVELOPMENT) 38,613,765,762

Grants 22,622,919,309

Loans 15,990,846,453

II) DONOR SUPPORT TO GOVERNMENT AGENCIES

OUTSIDE GOVERNMENT SYSTEMS 64,306,695,515

Grants 30,654,863,485

Loans 33,651,832,030

III) DONOR SUPPORT TO NON-GOVERNMENTAL

ORGANISATIONS 13,996,811,137

Grants 13,996,811,137

IV) TOTAL DONOR PROJECT SUPPORT 116,917,272,414

Grants 67,274,593,931

Loans 49,642,678,483



44/52

Project Title

Donor

Agency

Type of

Assistance

2012/13FY

Projection Primary Sector

DONOR SUPPORT TO GOVERNMNET

AGENCIES OUTSIDE GOVERNMNET

SYSTEMS 64,306,695,515

GRANTS 30,654,863,485

LOANS 33,651,832,030

Unallocated 3,328,548,888

UNDP Support to Government

Institutions UNDP Grant 3,328,548,888 Multi-sector

070 - Judiciary 81,855,460

Judiciary Support Project DfID Grant 81,855,460

Democratic

Governance

110 - Ministry of Economic Planning

and Development 273,989,143

Social Policy, Research and

Participation UNICEF Grant 121,439,578

Economic

Governance

Macro-economic Advisory Service

project (next phase) GDC Grant 152,549,565

Economic

Governance

111 - National Statistics 20,909,850

Financial and audit services Norway Grant 20,909,850EconomicGovernance

120 - Local Government & Rural

Development 5,108,853,212

Programme Support for Mangochi

District Council ICEIDA Grant 518,713,200

Integrated Rural

Development

Rural Infrastructure Development

Program PE 1 replenishment EU Grant 1,092,580,800

Integrated Rural

Development

Rural Infrastructure Development

Program PE 1 advance EU Grant 2,902,167,750

Integrated Rural

Development

Promoting democratic

decentralization (next phase ii) GDC Grant 13,033,739

Integrated Rural

DevelopmentPromoting democratic

decentralization (next phase iii) GDC Grant 582,357,723

Integrated Rural

Development

190 - Agriculture and Food Security 1,924,668,441

Support to Smallholder farmers Union

of Malawi FICA Grant 13,646,334 Agriculture

DepartmentofAgricultural Extension

Workers -Material Support FICA Grant 231,076,742 Agriculture

Improving food security and nutrition

policies and programme outreach FAO Grant 407,128,135 Agriculture

Financialstatement Annex 6:Summary ofOff-Budget Supportto Malawi

Project Title

Donor

Agency

Type of

Assistance

2012/13FY




45/52

Project Title

Donor

Agency

Type of

Assistance

2012/13FY


Strengthening Pest and Pesticides

Management Capacities in Malawi FAO Grant 77,806,980 Agriculture

Farm Income Diversification

Programme (FIDP) PE 2

Replenishment EU Grant 682,863,000 Agriculture

FIDP PE2 advance EU Grant 512,147,250 Agriculture

210 - Department of Irrigation &

Water Development 13,399,737,775

National water Development Program

- Trust Fund AfDB Grant 364,307,411

Water, Sanitation

and Irrigation

Improving Water and Sanitation

Access in Blantyre AfDB Grant 67,600,364

Water, Sanitation

and Irrigation

Irrigation, RuralLivelihoodand

Agriculture Devt. (IRLAD) World Bank Loan 12,967,830,000

Water, Sanitation

and Irrigation

250 - Education Science and

Technology 6,883,904,446

Initial Primary Teacher Education

(IPTE) II Canada Grant 466,841,880 Education

Support to education sector response

to HIV UNESCO Grant 20,748,528 Education

Support to Technical and Vocational

Education and Training (TEVET) UNESCO Grant 135,154,096 Education

Support to Education Management

Information System (EMIS) UNESCO Grant 5,187,132 Education

Support to mainstreaming of CFSconcepts in public primary schools UNESCO Grant 259,357 Education

Early childhood development (ECD) UNICEF Grant 388,978,879 Education

Basic Education UNICEF Grant 1,520,786,442 Education

Youth Development UNICEF Grant 320,349,232 Education

HIV Prevention for Adolescents UNICEF Grant 273,355,372 Education

Construction of 3 TTCs in Rumphi,

Mchinji and Chikwawa

BADEA,

OPEC, Saudi

Fund Loan 2,827,500,000 Education

School feeding program GDC Grant 103,691,314 Education

Improving Basic Education (Next

Phase) GDC Grant 24,734,878 EducationBasic Education Programme (next

Phase) GDC Grant 674,308,943 Education

Nutrition and access to education

(preparatory phase) GDC Grant 30,650,407 Education

Primary school education (phase III) GDC Grant 91,357,985 Education

270-Finance 1,366,755,402

Institutional Support Project for PFM AfDB Grant 1,244,026,056

Economic

Governance

Support for Aid Coordination Norway Grant 2,287,538 Economic



46/52

Project Title

Donor

Agency

Type of

Assistance

2012/13FY


Governance

Statistical SWAp - senior long-term

advisor Norway Grant 55,228,392

Economic

Governance

Public Financial Management (PFM)

PE 1 EU Grant 65,213,417

Economic

Governance

310 - Health 12,786,084,085

Malawi/Norway/Germany Initiative on

maternal mortality Norway Grant 855,212,865 Health

Essential Drug Project through UNICEF DfID Grant 1,049,746,343 Health

Family Planning Commodities through

UNFPA DfID Grant818,554,600

Health

Construction of Nkhatabay District

Hospital OPEC Loan 794,198,479 HealthConstruction of Phalombe District

Hospital BADEA Loan 518,713,200 Health

Health Sector Support WHO Grant 748,321,598 Health

Maternal, Neonatal and Child Health UNICEF Gr ant 1,234,170,426 Health

Promotive, preventive & curative

nutrition UNICEF Grant 1,835,784,889 Health

PMTCT & Pediatric HIV Treatment and

Care UNICEF Grant 925,918,623 Health

Water, Hygiene and Sanitation UNICEF Grant 1,614,541,519 Health

Improving access to high quality

comprehensive HIV-related services in

Malawi CDC Grant 1,447,680,000 HealthPromotion of sustainable structures

for Health Delivery Services (next

Phase) GDC Grant 459,756,097 Health

Promotion of mothers health

(preparatory phase) GDC Grant 23,729,348 Health

Accompanying measures to the

contribution to the Health Sector

SWAp GDC Grant 459,756,097 Health

320 - Gender, Child and Community

Development 1,707,694,069

Women and equal opportunities Norway Grant 102,458,265

Gender, YouthDevelopment and

Sports

Child Protection UNICEF Grant 1,565,919,159

Gender, Youth

Development and

Sports

Partnership for Child Protection UNICEF Grant 39,316,645

Gender, Youth

Development and

Sports

340 - Home Affairs and National 20,769,277



47/52

Project Title

Donor

Agency

Type of

Assistance

2012/13FY


Defense

Refugee Support UNHCR Grant 20,769,277

Democratic

Governance

360 - Tourism, Wildlife and Culture 8,429,090

Support to intangible cultural heritage UNESCO Grant 8,429,090

Tourism, Wildlife

and Culture

420 - Road Fund Administration 16,543,590,351

Nacala corridor project AfDB Loan 1,711,843,005

Road, Public

Works and

Transport

Liwonde - Naminga Road OPEC Loan -

Road, Public

Works and

Transport

Karonga - Chitipa P.R.C. Grant -

Road, Public

Works and

Transport

Zomba -Jali- Kamwendo- Phalombe-

Chitakale road

OPEC &

BADEA Loan 4,524,970,000

Road, Public

Works and

Transport

Thyolo- Thekerani- Mouna - Bangula

BADEA &

Kuwait Loan 3,729,375,000

Road, Public

Works and

Transport

Jenda -Embangweni-Edingeni-Euthini ADFD Loan 4,704,750,000

Road, Public

Works and

Transport

Ntcheu- Tsangano- Mwanza Feasibility

Study AfDB Loan 219,929,225

Road, Public

Works and

Transport

Zomba - Blantyre road AfDB Loan 1,652,723,121

Road, Public

Works and

Transport

470 - Natural Resource, Energy and

Environment 641,807,526

Lake Chirwa Basin Climate Change

Programme Norway Grant 292,737,900

Environment,

Lands and Natural

Resources

Enhancing community resilience to

climate change programme Norway Grant 209,098,500

Environment,

Lands and Natural

Resources

African Adaptation programme WFP Grant 139,971,126

Environment,

Lands and Natural

Resources

Electoral Commission 209,098,500

Electoral Support Norway Grant 209,098,500

Democratic

Government



48/52

Project Title

Donor

Agency

Type of

Assistance

2012/13FY


DONOR SUPPORT TO NON-

GOVERNMENTAL AGENCIES 13,996,811,137

Microloan foundation Support FICA Grant 13,653,163 Agriculture

Support to Trustees of Agriculture

Promotion Programme (TAPP) FICA Grant 6,350,626 Agriculture

Malawi Milk Production Association FICA Grant 34,143,150 Agriculture

MalawiOrganicGrowersAssociation

(MOGA) FICA Grant 6,828,630 Agriculture

Malawi Economic Justice Network

(MEJN) support FICA Grant 13,602,631 Agriculture

Support to NASFAM FICA Grant 13,646,334 Agriculture

Support to farmers Union of Malawi FICA Grant 13,575,316 Agriculture

Promoting Conservation Agricultureand Sustainable Crop production in

smallholder systems (NASFAM) Ireland Grant 56,550,000 Agriculture

USAID initiative for long term training

capacity building in Malawi USAID Grant 45,240,000 Agriculture

Kulera Biodiversity Activity USAID Grant 72,987,200 Agriculture

Malawi Smallholder Dairy

Development program USAID Grant 22,115,348 Agriculture

Support to NASFAM Strategic

Development Programme III Norway Grant 752,754,600 Agriculture

SCC - Malawi's Lake Basin Programme

Phase II Norway Grant 29,273,790 Agriculture

Technical Assistance under south-south cooperation with the P.R. of

China in ASWAP in Malawi FAO Grant 129,678,300 Agriculture

Purchase for progress WFP Grant 225,186,368 Agriculture

NCA prevention of Human trafficking

Phase II Norway Grant 146,368,950

Democratic

Governance

Support to constitutional bodies Norway Grant 146,368,950

Democratic

Governance

UNDP - Democracy consolidation

programme Phase 4 Norway Grant 167,278,800

Democratic

Governance

CHRR/CEDEP promotion of Lesbian,

Gay, Bisexual, and Transgender (LGBT)

rights in Malawi Norway Grant 39,519,617

Democratic

GovernanceDfID - Tilitonse Civil Society

Governance Fund (CSGF) Norway Grant 250,918,200

Democratic

Governance

Social Protection UNICEF Grant 436,438,024

Economic

Governance

Planning RBM and HRBA Capacities UNICEF Grant 124,231,293

Economic

Governance

Interactive radio institution USAID Grant 157,921,757 Education

Malawi teacher professional

development support activity USAID Grant 197,925,000 Education



49/52

Project Title

Donor

Agency

Type of

Assistance

2012/13FY


Education decentralization support

activity USAID Grant 63,360,000 Education

Extractive Industries Transparency

Initiative (EITI) National Workshop

support -GIZ Norway Grant 71,093,490 Energy and Mines

Mountain Biodiversity Increase

Livelihood Security (MOBILISE) USAID Grant 58,359,600

Environment,

Lands and Natural

Resources

Support to Mount Mulanje

Biodiversity Conservation Trust Norway Grant 209,098,500

Environment,

Lands and Natural

Resources

CELA improving prison conditions for

women and youth II Norway Grant 112,913,190

Gender, Youth

Development and

Sports

Joint UN Programme on Adolescent

Girls in Malawi Norway Grant 244,394,327

Gender, Youth

Development and

Sports

NGO- Gender coordination network

Phase III Norway Grant 167,278,800

Gender, Youth

Development and

Sports

MHRRC Response to Gender Based

Violence Norway Grant 230,008,350

Gender, Youth

Development and

Sports

Support to Banja La Mtsogolo FICA Grant 54,629,040 Health

Refugee Support UNHCR Grant 75,665,936 Health

Communicating Networking &

Capacity building to effectively

respond together (CONTERT) USAID Grant 292,985,550 Health

Support for Integrated System

Delivery-Excellence (SSDC-E) program USAID Grant 292,985,550 Health

National distribution and

management of Long Life Insecticide

treated nets USAID Grant 292,985,550 Health

Malawi: Civil Society Support Program

for Local Governance USAID Grant 292,985,550 Health

In-doorresidualspraying USAID Grant 292,985,550 Health

Capacity support for early childhood

development and Psycho-social

support USAID Grant 19,792,500 HealthExtending quality improvement for

HIV/AIDS in Malawi USAID Grant 617,843,358 Health

Maternal Child Health Integrated

Program -MCHIP USAID Grant 22,620,000 Health

Intermittent preventive treatment of

pregnant women USAID Grant 48,067,500 Health

Deliver task order 1-host country

strategic information capacity USAID Grant 705,461,250 Health

Procurement ofcontraceptives USAID Grant 105,183,000 Health

NCA Access to quality health care Norway Grant 660,893,614 Health



50/52

Project Title

Donor

Agency

Type of

Assistance

2012/13FY


HIV related support UNAIDS Grant 129,678,300 Health

HIV and AIDS related support UNAIDS Grant 129,678,300

Health, Nutrition,

gender, and local

government

Campaign for the enactment of access

to information legislation (MISA

Malawi Chapter) UNESCO Grant 3,112,279

Information

Technology

Training of Journalists in election

coverage UNESCO Grant 1,685,818

Information

Technology

Training of Journalists to reinforce

human rights and gender UNESCO Grant 3,112,279

Information

Technology

Establishment of the USISYA

Community Radio Station UNESCO Grant 5,187,132

Information

Technology

Establishment of Nsanje/Chikwawa

Radio Station UNESCO Grant 6,224,558

Information

Technology

Strengthening capacity of

independent private radio stations UNESCO Grant 3,112,279

Information

Technology

World Press Freedom Day

Commemoration (MISA) UNESCO Grant 648,392

Information

Technology

Country programme (Support to

Education, Nutrition support and

Disaster risk reduction and food

security) WFP Grant 2,912,598,998 Multi-sector

Support to NGOs, and other

organizations Canada Grant 985,555,080 Multi-sector

COSOMACultureSupport SchemeII Norway Grant 83,639,400

Tourism, Wildlife

and Culture

Red Cross Malawi support project FICA Grant 56,905,364

Vulnerability,

Disaster, and Risk

Management

Assistance to refugees WFP Grant 274,147,707

Vulnerability,

Disaster, and Risk

Management

CRS -WALA: Land and water

management USAID Grant 1,367,379,000

Water, sanitation

and Irrigation



51/52


52/52

Financial Statement Final

Documents