Financial Statement Final

Budget Document No.
Malawi Government
DRAFT
2012/13 Financial Statement
Ministry of Finance
PO Box 30049
Lilongwe
2012/13 Financial Statement
Ministry of Finance 2012/13 Financial Statement
Page i
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 ................................................................................................................................. 8
3. 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

3.3 Expenditure.. ..................................................................................................................................... 13
3.4 Overall Balance and Net Lending............................................................................. 14
4. ESTIMATES OF REVENUES AND EXPENDITURE FOR THE 2012/13 FISCAL YEAR ......... 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 ............................................................................ ....... 18
4.3.2 Development Expenditure........................... ................................................................................... 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
ii
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 centage in 2012/13 Estimates ........................................................... 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
Page iii
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
iv
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
the expenditures of Government and the Malawi Growth and Development Strategy (MGDS).
Page 1
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
rate of 2.1 per cent in 2009.
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 a
domestic 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.
Table 1: 2010/11 Approved and Revised Estimate and Actual Outturn (K million)
Revenue and Grants

Revenue
2010/2011
Approved
Estimate
2010/11
Revised
Estimate
287,117
296,908
2010/11
Actual
Variance
(Actual
minus
Revised)
273,252
(23,656)
(3,651)
201,748
212,574
208,923
171,196
175,022
176,974
30,552
37,552
31,949
(5,603)
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)
5,446
6,555
7,191
636
31,851
31,851
18,876
(12,975)
296,195
(13,800)
Tax revenue
Non-tax revenue
Grants
Education SWAp
Project Grants
Total expenditure, Net lending and

Direct payments
Total expenditure
297,084
309,995
1,952
294,784
307,695
295,195
(12,500)
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
956
956
610
(346)
19,171
19,171
22,209
3,038
110,404
112,840
114,913
2,073
11,757
11,757
14,635
2,878
21,229
24,128
22,359
(1,769)
7,400
7,600
12,042
4,442
Recurrent expenditure
Foreign
Domestic
Goods, services and transfers
Of which Subventions
Subsidies
Social Benefits
Page 3
2010/2011
Approved
Estimate
2010/11
Revised
Estimate
2010/11
Actual
Variance
(Actual
minus
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)
(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
Overall balance (including grants)
Borrowing
23,092
27,004
Program
6,040
5,428
Project Loans
Amortisation
Domestic borrowing (net)
2.1
17,052
21,576
12,693
(14,229)
(14,311)
12,811
(5,428)
(8,765)
(2,056)
(2,056)
1,974
4,030
(11,920)
(11,861)
14,037
25,898
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
K84 billion.
2.1.1
Domestic Revenues
The Approved estimates for domestic revenues comprised K171 billion Tax Revenues and K30.6
billion Non Tax Revenues. These estimates were revised upwards to K213 billion at Mid-Year
comprisinng K175 billlion Tax Reevenues and K37.6 billioon Non Tax Revenues. H
However, K2208.9
billion w
was collected
d implying ann under collection of K33.7 billion. This
T was on account of uunder
collectionn on Non Taax Revenuess of K5.6 billion. The Tax
T Revenuees slightly ovver performeed by
K1.9 billlion.
Kmillion
Figure 1: 2010/11 Domestic

D
Revenue Outturn
2.1.2
G
Grants
Grants inn 2010/11 Fiiscal Year w

were projecteed at K85 billion comprrising K19.99 billion Proogram
Grants, K
K33.6 billion
n Dedicated Grants and K31.9 Projeect Grants att the Approvved Budget sstage.
Year, Grantts were marrginally reviised downw
wards to K844 billion, coomprising K16.8
K
At Mid-Y
Program Graants, K35.7 billion Deedicated Graants and K331.9 billionn Project Grrants.
billion P
wn in
Overall, Grants undeerperformedd by K20 billion at the end of the financial yeear. As show
Figure 2, Project Grrants underperformed byy K13 billioon. Dedicatedd Grants unnderperformeed by
K5.1 billlion mainly on account of underperrformance on Health Seector SWAp resources which
w
fell shortt by K4.2 billlion and Proogram Grantts underperfoormed by K11.9 billion.
Page 5
Figure 2:
2 2010/11 P erformancee of Grants
2.2
Expendituree
E
Year were eestimated at K297 billioon comprisinng K216.9 billion

0/11 Fiscal Y
Expendittures in 2010
ment Expendditures. At Mid-Year, these
K77.9 billionn Developm
ures and K
Recurrennt Expenditu
billion comprisingg K222.6 bbillion Recuurrent
wards to K310
K
upw
r
expendituures were revised
Developmennt Expendituures. Total expendituree outturn foor the
Expendittures and K85
K billion D
m
Fiscal Yeear amounteed to K296 bbillion resulting in an unnder expenditure of K13..8 billion, mainly
Figure 3 bellow highlighhts the patteern of
on accouunt of reduceed expendituures in Projeect Grants. F
the 2010//11 expenditture outturn by different categories.
by Categorry
Figure 3:
3 2010/11 Expenditure
E
2.2.1
penditure
R
Exp
Recurrent Account
A
Total Reecurrent Exp

penditure too the end off the 2010/111 Fiscal Ye aar amountedd to K230 billion
This over
b
against an
a estimate of
o K222.6 bbillion refleccting an over expenditurre of K7.6 billion.
expendituure was maiinly recordedd in Wages and Salaries, Goods annd Services, Interest Payyment
and Sociial Benefits. An increasse in Wages and Salariees was as a result of reecruitment inn key
public seervice deliv
very sectors such as seecurity relatted Institutions, Healthh, Educationn and
Agricultuure. Social Benefit
expennditures incrreased by K44 billion on account of iincreased nuumber
B
of retireees.
2.2.2
Expendituree
D
Development Account E
K20.1 billion. The

Expenditures posted an under expennditure of K
nt Account E
Overall, Developmen
me donor-fuunded
ments in som
under exxpenditure was
w mainly on accountt of delayedd disbursem
projects.
Page 7
2.3
Overall Balance
The 2010/11 Fiscal Year ended with a high fiscal deficit position than anticipated. The overall
Balance was a negative variance of K22.9 billion against a targeted overall deficit of K13 billion.
The outturn is largely explained by poor performance of Revenues and Grants which missed
the target by K3.7 billion and K20 billion respectively.
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.
Table 2: 2011/12 Approved and Revised 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
203,504
203,504
180,905
- 22,599
38,973
38,973
26,849
- 12,125
65,233
44,991
52,678
Tax revenue
Nontax revenue
Grants
Program
19,811
362
7,687
362
Page 9
2011/12
Approved
Estimate
2011/12
Revised
Estimate
2011/12
Outturn
Variance
( Outturn
minus
Revised)
28,336
29,164
35,116
5,952
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
Roads
2,048
Dedicated grants
Of which:
-13,742
2,880
2,880
17,086
15,827
17,200
1,373
Total Expenditure, Net lending and

Direct Payments
303,724
300,093
328,105
28,011
Total Expenditure
303,724
300,893
328,105
27,211
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
18,671
18,671
18,598
- 73
1,124
1,762
1,645
-117
114,245
106,413
124,043
17,630
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
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
7,244
Project Grants
Domestic
Foreign
Of which: Subventions
Net lending
800
3,986
Total financing (net)

Foreign (net)
10
- 800
- 12,626
- 67,901
- 55,275
- 3,986
12,626
70,051
57,425
11,378
12,942
15,657
2,715
2011/12
Approved
Estimate
2011/12
Revised
Estimate
Borrowing
13,747
15,311
Program
1,357
2,921
12,389
12,389
Project Loans
Amortization
- 2,369
- 2,369
Net domestic debt
- 15,364
- 316
3.2
2011/12
Outturn
18,384
-
Variance
( Outturn
minus
Revised)
3,073
- 2,921
18,260
5,870
- 2,726
- 358
54,394
54,710
Revenues and Grants
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.
3.2.1
Domestic Revenues
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 is mainly attributed to poor performance of the economy.
Page 11
Kmillion
Figure 4: 2011/12 Domestic Revenue and the Likely Outturn
3.2.2
G
Grants
were projected at K65.2 bbillion comprising K19.88 billion Proogram

Grants inn 2011/12 Fiiscal Year w
At Mid Yea rr, the
on Dedicatedd Grants annd K17.1 billion Projecct Grants. A
Grants, K
K28.3 billio
Dedicated Grants
G
mprising K229.2 billion D
estimatess were revised downwarrds to K44.99 billion com
and K15.8 billion Prroject Grantts. It is projeected that a total of K552.7 billion will be receeived,
Progrram Grants, K35.1 billiion Dedicateed Grants annd K17.2 billion
comprisinng K362 million
m
Grants repressenting an ovver performaance of K7.77 billion.
Project G
12
Perfoormance by Category
G
Figure 5:
5 2011/12 Grants
3.3
e
Expenditure
E
Total Exxpenditures and Net Lending in 2011/12 Fiscaal Year wer e projected aat K303.7 billion
K69.9 billionn Developmeent Expendittures.
Recurrrent Expendditures and K
b
comprisinng K233.8 billion
expendditures weree revised doownwards too K300.1 biillion comprrising
Mid Year, t hese
h
At the M
ment Expendditures. Projected
urrent Expennditures and K70.2 billioon Developm
K229.1 bbillion Recu
outturn is that Total Expenditures and Net Lending willl amount too K328.1 billlion, comprrising
urrent Expeenditures annd K77.4 biillion Devellopment Exxpenditures. This
K250.7 billion Recu
mprising K221.6 billion in the Recuurrent
expendiiture of K288 billion com
o
outturn rreflects an over
ment Expennditure.
Expenditture and K7.2 billion in tthe Developm
Page 13
Kmillion
Figure 6: 2011/12 Expenditure by Categorry
3.4
O
Overall Bala
ance and Neet Lending
The 20111/12 Fiscal Year
Y is estim
mated to end with a high fiscal deficitt position off K67.9 billioon as
opposed to K12.6 billlion at Mid--Year. The ooutturn is larggely explainned by poor performance
p
e of
Domesticc Revenues which
w
misseed the target by K34.7 biillion and inccreased expeenditures to a
tune of K
K28 billion.
14
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.
Page 15
Table 3: 2012/13 Budget Estimates (K million)
Revenue and Grants

Revenue
Tax revenue
Nontax revenue
Grants
Program
Dedicated grants
Of which:
Food Security
NAC Inflows
Health SWAP
Education SWAP
Roads
Project Grants
Total Expenditure, Net lending and
Direct Payments
Total Expenditure
Wages and salaries
Interest payments
Domestic
Foreign
Of which: Subventions
Subsidies
Social Benefits (Pension and
Gratuity)
Part II (domestically financed)
Part I (foreign financed)
Net lending
Total financing (net)
16
2011/12
Approved
2011/12
Revised
Estimate
Estimate
2011/12
Outturn
2012/13
estimate
307,710
242,477
203,504
38,973
287,468
242,477
203,504
38,973
260,203
207,754
180,905
26,849
394,472
270,392
236,459
33,932
65,233
19,811
28,336
44,991
29,164
52,678
362
35,116
124,079
53,864
47,617
2,545
4,812
10,064
8,868
2,048
17,086
7,515
5,807
2,100
13,742
15,827
7,132
8,590
10,407
2,880
17,200
8,577
12,229
7,771
15,053
3,996
22,598
303,724
303,724
233,827
66,182
19,795
18,671
1,124
114,245
13,930
21,606
300,093
300,893
229,099
67,916
20,433
18,671
1,762
106,413
14,730
23,337
328,105
328,105
250,686
69,916
20,243
18,598
1,645
124,043
16,778
24,622
408,390
408,390
332,139
86,822
28,753
25,210
3,543
156,982
17,013
40,884
12,000
69,897
40,422
29,475
-
11,000
70,195
41,979
28,216
800
11,863
77,419
41,959
35,460
-
18,698
76,251
37,655
38,596
-
3,986
- 12,626
- 3,986
12,626
- 67,901
- 13,470
70,051
Foreign (net)
Borrowing
Program
Project Loans
Amortization
Net domestic debt
4.2
2011/12
Approved
2011/12
Revised
Estimate
Estimate
11,378
13,747
1,357
12,389
- 2,369
- 15,364
12,942
15,311
2,921
12,389
- 2,369
- 316
2011/12
Outturn
15,657
18,384
18,260
- 2,726
54,394
2012/13
estimate
19,010
3,037
15,973
- 5,523
-
Revenues and Grants
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.
4.2.1
Domestic Revenues
Domestic Revenues in 2012/13 Fiscal Year are expected to amount to K270.4 billion comprising
K236.5 billion Tax Revenues and K33.9 billion Non Tax Revenues.
4.2.2
Grants in 2012/13 Fiscal 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
Expenditure
In 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.
Page 17
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
effect of the exchange rate adjustment 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 between 2011/12 and 2014/15 Financial Years.
4.3.1.1 Transfers to Local Government Councils

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.
18
Table 4: Transfer to Councils by Sector

Sector
Agricultural Sector
2010/11
Approved
2011/12
Approved
2011/12 Revised
Estimate
Estimate
Estimate
2012/13 Draft
Estimates
517,102,666
517,102,666
517,102,666
517,102,666
1,535,220,085
2,646,078,085
3,420,114,085
5,691,994,722
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
9,486,943,880
9,076,916,445
Education Sector
Of which teaching and learning

materials
Health Sector
9,172,388,280
9,992,388,280
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
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
Rehabilitation of City Roads

/ Infrastructure Development
Fund
Page 19
Sector
Total
2010/11
Approved
2011/12
Approved
2011/12 Revised
Estimate
Estimate
Estimate
13,237,001,104
Of Which Leave Grants
2012/13 Draft
Estimates
15,990,294,429
16,258,886,029
18,140,739,231
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 K37.7 billion is from Domestic Revenues.
4.4
Overall Balance
The 2012/13 Financial Year is estimated to end with a fiscal deficit position of K13.5 billion.
This is largely explained by the gap between the projected Revenues and Expenditures.
20
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
that have been isolated are as follows:
5.2
Agriculture and Food Security;
Transport Infrastructure;
Energy, Industrial Development, Mining and Tourism;
Education, Science and Technology;
Public Health, Sanitation, Malaria and HIV/AIDS Management;
Integrated Rural Development;
Green Belt Irrigation and Water Development;
Child Development, Youth Development and Empowerment; and
Climate Change, Natural Resources and Environmental Management.
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
Table below shows the projected allocations to various key areas.
Page 21
Table 5: MGDS Allocations in 2012/13 Estimates (K million)

2011/12
2011/12
2012/13
Sector
Approved
Revised
Estimates
Estimates
Estimates
2013/14
Estimates
2014/15
Estimates
Agriculture and Food

Security
39,202
41,041
66,509
67,259
62,575
Transport Infrastructure
34,675
30,387
35,031
40,406
31,278
10,053
9,046
9,227
12,421
4,570
55,801
61,187
76,407
74,564
75,827
42,775
37,425
49,145
34,446
33,228
12,769
16,661
15,314
7,423
5,043
7,388
7,940
4,748
4,537
2,139
3,186
4,249
11,747
2,610
2,243
2,830
2,917
1,857
2,650
2,616
94,946
99,075
53,340
78,014
100,062
Energy, Industrial
Development, Mining
and Tourism
Education, Science and
Technology
Public Health,
Sanitation, Malaria and
HIV/AIDS Management
Integrated Rural
Development
Green Belt Irrigation and
Water Development
Child Development,
Youth Development
Empowerment
Climate Change, Natural
Resources and
Environmental
Management
Other
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
mention a few.
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
22
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.
Table 6: MGDS Allocations as a Percentage in 2012/13 Estimates

2014/15
Projections
2011/12
Approved
2011/12
Revised
2012/13
Projections
2013/14
Projections
Agriculture and Food Security
13%
13%
21%
21%
20%
Transport Infrastructure
11%
10%
11%
12%
10%
3%
3%
3%
4%
1%
Education, Science and Technology
18%
20%
24%
23%
24%
Public Health, Sanitation, Malaria and

HIV/AIDS Management
14%
12%
15%
11%
10%
Integrated Rural Development
4%
5%
5%
2%
2%
Green Belt Irrigation and Water

Development
2%
3%
1%
1%
1%
Child Development, Youth

Development Empowerment
1%
1%
4%
1%
1%
Climate Change, Natural Resources and

Environmental Management
1%
1%
1%
1%
1%
Other
31%
32%
16%
24%
31%
Total
100%
100%
100%
100%
100%
Sector
Energy, Industrial Development,

Mining and Tourism
Page 23
Financial Statement Annex 1: Vote Allocation Summary (K Millions)

20 11/12
Approved
Estimate
2011/12
Revised
Estimate
2012/13
Estimates
2013/14
Estimate
2014/15
Estimate
43.31
43.31
44.61
45.95
47.33
7,202.62
6,029.03
17,114.97
19,724.36
15,583.92
12,000.00
11,000.00
18,698.42
17,938.58
20,584.72
19,794.93
20,432.60
28,752.80
31,345.07
31,382.95
1,567.78
1,620.07
1,842.79
1,648.00
1,652.60
456.12
500.32
402.13
385.72
371.68
1,927.27
1,929.71
2,428.36
2,493.23
1,695.62
3,559.58
3,559.58
3,832.58
3,560.41
3,411.50
3,519.40
3,978.09
4,279.48
6,858.18
5,611.45
093 - Department of Human Resources Management

and Development
3,933.80
614.61
10,786.01
27,971.63
44,904.32
094 - Nutrition, HIV and AIDS and National AIDS

Commission
5,599.70
6,460.22
12,908.68
4,850.47
3,530.44
163.43
164.72
174.83
168.69
163.50
234.43
234.43
226.04
215.11
205.61
763.34
762.22
1,015.47
1,979.48
3,523.07
7,008.63
7,180.67
7,608.92
8,196.10
7,293.03
1,591.87
1,575.97
653.58
580.70
353.47
269.18
273.08
416.65
330.33
325.96
5,372.08
5,357.56
7,354.45
2,949.40
1,865.85
1,743.75
2,144.46
3,711.77
1,820.31
812.75
4,478.08
4,673.06
7,148.32
7,248.91
5,340.60
827.74
795.22
448.67
691.52
316.63
MINISTRY/DEPARTMENT
PE+ORT+Development
010- The Presidency
020 - Compensations and Refunds
030 - Pensions and Gratuities
040 - Public Debt Charges
050 - State Residences
060 - National Audit Office
070 - The Judiciary
080 - National Assembly
090 - Office of the President and Cabinet
097 - Public Service Commission

099 - Directorate of Public Procurement
100 - Defence
101 - Malawi Defence Force
110 - Ministry of Economic Planning &
Development
111 - National Statistical Office
120 - Local Government and Rural Development
121 - National Local Government Finance
Committee
130 - Lands and Housing
180 - Youth and Sports
24
MINISTRY/DEPARTMENT
190 - Agriculture and Food Security
200 - Disability and Elderly Affairs
210 - Water Development and Irrigation
240 - Office of the Vice President
250 - Education, Science and Technology
260 - Foreign Affairs and International Cooperation
270 - Ministry of Finance
271 - Accountant General's Department
272 - Local Development Fund
273 - Malawi Revenue Authority
274 - Road Fund Administration
275 - Subvented Organisations
278 - Unforseen Expenditure
279 - Financial Intelligence Unit
321 - Ministry of Health
320 - Gender, Children and Social Welfare
330 - Information
340 - Home Affairs
341 Malawi Police Service
342 - Malawi Prisons Service
343 - Immigration
350 - Justice
351 - Director of Public Prosecution and State
Advocate
20 11/12
Approved
Estimate
2011/12
Revised
Estimate
2012/13
Estimates
2013/14
Estimate
2014/15
Estimate
37,715.02
40,153.68
65,021.43
58,242.84
53,811.65
301.73
288.18
293.09
201.05
213.09
7,270.42
7,822.29
4,630.54
4,422.42
2,028.02
128.85
173.52
300.93
322.25
301.79
39,792.62
43,590.44
54,682.32
52,917.48
53,658.06
4,665.23
4,438.30
6,320.07
5,656.14
5,462.17
3,832.71
2,073.16
2,913.33
1,141.40
1,050.36
5,255.92
4,918.85
5,345.42
4,965.87
4,249.33
4,880.84
8,387.31
3,475.54
1,880.93
1,592.75
6,240.00
6,240.00
7,112.00
7,247.94
7,986.84
10,970.39
7,663.48
11,010.00
12,111.00
13,322.10
13,930.30
14,730.30
17,013.39
17,435.44
19,039.09
826.01
576.00
1,480.00
800.00
720.00
147.54
143.81
161.23
156.94
153.44
26,766.46
21,061.70
26,743.64
22,772.81
22,328.26
1,675.87
1,683.50
10,033.33
1,047.20
1,049.12
915.12
728.92
1,124.65
1,139.72
586.35
559.02
561.36
766.74
768.94
1,310.87
5,376.61
6,226.86
5,905.85
6,106.02
6,044.00
2,493.14
2,447.25
2,041.68
5,400.31
5,212.96
4,118.87
2,920.79
6,345.28
1,047.35
604.75
435.64
368.55
375.86
347.46
322.17
392.16
439.30
197.91
187.22
177.87
Page 25
MINISTRY/DEPARTMENT
352 - Registrar General
353 - Administrator General
354 - Legal Aid
360 - Tourism and Culture
370 - Labour
390 - Industry and Trade
400 - Transport and Public Works
420 - National Roads Authority
430 - Human Rights Commission
460 - Electoral Commission
470 - Energy and Mining
471 - Geological Surveys
472 - Mines Department
480 - Environment and Climate Change
510 - Anti Corruption Bureau
550 - Office of the Ombudsman
560 - Law Commission
Councils
26
20 11/12
Approved
Estimate
2011/12
Revised
Estimate
2012/13
Estimates
2013/14
Estimate
2014/15
Estimate
101.68
91.96
120.11
111.71
104.26
114.62
93.00
116.10
102.35
96.40
117.67
95.28
122.61
109.71
104.57
2,149.53
2,168.64
2,728.26
2,366.89
984.19
438.79
391.77
574.96
443.05
475.17
2,866.17
2,825.47
1,696.77
2,251.49
1,493.65
2,201.58
2,325.69
2,576.96
2,919.98
2,216.18
13,730.26
13,730.26
12,150.90
15,029.30
7,885.05
280.14
274.44
287.38
290.99
295.21
501.96
629.50
919.10
5,415.01
519.16
2,742.54
2,829.48
711.31
6,334.78
611.91
135.80
126.77
169.05
159.34
150.83
144.43
128.13
166.62
156.11
146.83
1,770.07
2,531.28
2,509.68
1,127.79
1,149.15
983.70
956.79
934.18
118.33
107.35
168.00
163.45
159.60
215.13
202.16
217.27
357.50
363.55
15,990.29
16,258.89
18,140.74
16,193.27
14,704.04
Financial Statement Annex 2: Personal Emoluments (K Millions)

MINISTRY/DEPARTMENT
PE
010- The Presidency
070 - The Judiciary
093 - Department of Human Resource
Management and Development
094 - Nutrition, HIV and AIDS and National
AIDS Commission
100 - Defence
110 - Ministry of Economic Planning and
Development
Committee
130 - Lands and Housing
260 - Foreign Affairs and International
Cooperation
2011/12
Approved
Estimate
2011/12
Revised
Estimate
2012/13
Estimates
2013/14
Estimate
20 14/15
Estimate
43.31
43.31
44.61
45.95
47.33
261.48
313.78
538.57
552.33
566.50
154.15
183.34
183.15
188.65
194.31
985.39
1,024.81
1,056.78
1,000.83
1,030.86
1,603.86
1,508.72
1,646.86
1,593.26
1,641.06
894.79
1,019.09
1,035.83
1,066.91
1,098.91
3,691.14
406.07
10,562.56
27,756.03
44,700.27
50.68
76.20
71.11
55.75
57.43
75.85
88.95
87.25
89.87
92.57
98.15
98.15
89.76
92.46
95.23
40.11
47.73
44.97
46.32
47.71
3,778.09
3,650.13
4,178.38
4,292.28
4,409.59
117.25
125.40
133.58
127.29
131.10
104.73
129.13
127.48
131.30
135.24
966.17
1,001.88
910.53
937.85
965.98
473.63
553.86
556.17
572.86
590.04
435.41
496.96
497.86
512.79
528.18
115.01
128.59
136.34
140.43
144.64
3,123.11
3,583.87
3,965.85
4,069.83
4,176.92
50.25
57.65
53.40
54.34
55.88
390.96
439.75
466.10
456.40
470.09
48.85
93.97
87.84
90.48
93.19
25,273.51
28,478.13
32,646.48
35,646.48
38,646.48
1,865.03
1,869.03
2,857.87
2,933.85
3,012.12
240.48
240.48
235.44
243.44
254.69
151.04
187.58
196.78
202.68
208.76
77.39
86.39
91.07
93.81
96.62
Page 27
MINISTRY/DEPARTMENT
330 - Information and Civic Education
340 - Home Affairs
341 Malawi Police Service
342 - Malawi Prisons Service
343 - Immigration
350 - Justice
Advocate
354 - Legal Aid
360 - Tourism Wildlife and Culture
370 - Labour
Councils
28
2011/12
Approved
Estimate
2011/12
Revised
Estimate
2012/13
Estimates
2013/14
Estimate
20 14/15
Estimate
11,898.91
12,576.66
13,836.67
14,251.77
14,679.33
387.63
420.34
415.72
426.00
438.78
192.67
237.31
263.87
271.15
278.64
49.93
59.55
53.78
55.40
57.06
3,341.64
3,753.21
3,973.88
4,090.25
4,210.11
449.69
535.68
507.15
522.36
538.03
165.19
163.19
165.31
170.27
175.38
73.59
66.62
70.61
72.73
74.91
64.23
70.01
69.99
72.09
74.25
24.38
26.94
27.81
28.64
29.50
37.53
30.52
32.00
32.96
33.95
45.61
37.63
43.56
44.86
46.21
324.00
384.86
402.81
414.90
427.35
172.96
164.39
189.13
194.80
200.65
165.24
160.22
158.89
163.66
168.57
530.90
609.73
636.28
655.36
675.03
241.56
241.56
248.80
256.27
263.95
330.94
330.94
340.87
351.09
361.63
1,293.51
1,413.46
119.62
294.69
302.64
52.15
52.63
55.39
57.05
58.76
45.11
43.92
47.30
48.72
50.18
1,321.99
1,189.27
1,224.95
364.70
421.31
415.10
427.55
440.38
54.80
53.62
104.47
106.28
108.14
126.94
129.06
129.08
132.95
136.94
638.86
638.86
644.71
644.71
644.71
Financial Statement Annex 3: 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
ORT
020 - Compensations and Refunds
7,202.62
6,029.03
17,114.97
19,724.36
15,583.92
12,000.00
11,000.00
18,698.42
17,938.58
20,584.72
19,794.93
20,432.60
28,752.80
31,345.07
31,382.95
1,006.30
1,006.30
1,106.30
1,095.67
1,086.10
201.97
216.97
218.97
197.08
177.37
446.87
379.90
698.87
628.99
566.09
1,885.72
1,980.86
2,185.72
1,967.15
1,770.44
1,336.57
1,662.56
1,713.65
2,107.43
2,144.03
178.45
144.32
178.45
165.61
154.05
5,188.62
6,194.02
12,837.57
2,610.87
1,553.68
87.57
75.77
87.57
78.82
70.94
136.28
136.28
136.28
122.65
110.38
67.87
59.13
79.87
71.88
64.69
3,200.54
3,500.54
3,430.54
3,203.82
2,883.44
142.34
103.28
212.34
173.10
155.79
92.38
71.87
92.38
83.14
74.83
258.55
208.33
329.55
227.41
206.49
1,270.12
1,590.61
3,155.60
1,247.45
222.71
2,959.68
3,093.10
5,785.46
3,856.91
3,471.22
212.33
166.23
212.33
191.10
171.99
23,738.57
25,716.47
46,742.76
42,989.72
42,707.29
146.49
125.54
158.94
149.72
160.21
030 - Pensions and Gratuities

040 - Public Debt Charges
070 - The Judiciary
093 - Department of Public Service Management
094 - Nutrition, HIV and AIDS and National
AIDS Commission
100 - Ministry of Defence
110 - Ministry of Economic Planning and
Development
Committee
130 Lands and Housing
Page 29
MINISTRY/DEPARTMENT
20 11/12
Approved
Estimate
20 11/12
Revised
Estimate
20 12/13
Estimates
20 13/14
Estimate
20 14/15
Estimate
135.21
85.96
135.21
121.69
109.52
80.00
79.55
213.08
231.77
208.60
7,978.84
8,527.02
12,537.59
11,283.83
10,155.45
2,400.20
2,169.27
3,067.20
2,722.28
2,450.06
1,723.89
1,223.17
2,073.89
897.96
795.66
4,754.87
4,381.27
4,554.87
4,056.19
4,040.57
6,240.00
6,240.00
7,112.00
7,247.94
7,986.84
10,970.39
7,663.48
11,010.00
12,111.00
13,322.10
13,785.44
14,730.30
17,013.39
17,435.44
19,039.09
826.00
576.00
1,480.00
800.00
720.00
70.15
57.43
70.15
63.14
56.82
9,516.99
6,139.31
9,134.48
8,221.03
7,398.93
169.53
144.46
169.53
308.59
277.73
498.36
475.92
360.78
358.57
307.71
64.09
56.81
94.09
84.68
76.21
2,034.97
2,473.65
1,931.97
2,015.78
1,833.90
1,443.45
1,311.57
1,024.53
1,177.95
1,107.93
3,953.68
2,757.60
6,179.96
877.07
429.37
305.25
245.13
305.25
274.73
247.25
327.93
369.30
127.93
115.13
103.62
77.30
65.03
92.30
83.07
74.76
77.10
62.48
84.10
69.39
62.45
72.06
57.65
79.06
64.85
58.37

260 - Foreign Affairs and International
Cooperation
273 - Malawi Revenue Authority

274 - Roads Fund Administration
275 - Subvented Organisations
278 - Unforseen Expenditure

330 - Information
340 - Home Affairs
341 - Malawi Police Service
342 - Malawi Prisons Services
343 - Immigration
350 - Justice
Advocate
354 - Legal Aid
30
MINISTRY/DEPARTMENT
360 - Tourism and Culture
20 11/12
Approved
Estimate
20 11/12
Revised
Estimate
20 12/13
Estimates
20 13/14
Estimate
20 14/15
Estimate
375.53
333.78
390.53
351.47
316.33
185.84
147.39
185.84
167.25
150.53
316.81
281.14
316.81
285.13
256.62
760.68
647.96
760.68
684.61
616.15
38.58
32.89
38.58
34.72
31.25
171.02
298.56
578.23
5,063.92
157.53
427.57
364.55
370.09
338.08
309.28
83.66
74.14
113.66
102.29
92.06
89.32
74.21
119.32
107.39
96.65
343.08
353.37
363.97
317.28
282.02
393.68
354.31
318.88
63.53
53.73
63.53
57.17
51.46
88.19
73.09
88.19
79.37
71.44
15,351.44
15,620
18,140.74
16,193.27
14,704.04
370 - Labour
Councils
Page 31
Financial Statement Annex 4: Subvented Organization Allocation Summary (K million)
Category
2011/12
Approved
Estimate
2011/12
Revised
Estimate
2012/13
Estimates
2013/14
Estimates
2014/15
Estimates
7,407
8,107
6,062.95
6,123.58
6,184.82
274
374
674.38
331.12
334.44
183
183
230.00
232.30
234.62
74
74
93.70
88.68
89.37
1,100
1,100
1,500.00
1,515.00
1,530.15
Malawi Council for the

Handicapped
224
224
223.69
202.00
204.02
Malawi National Council of

Sports
520
520
520.00
525.20
530.45
Small and Medium

Entreprise Board
168
168
168.31
151.50
153.02
Health Service Regulatory

Authority
100
100
100.00
90.90
91.81
National Herbarium and

Botanic Gardens
146
146
165.70
167.35
169.03
420
420
549.84
549.84
549.84
35
35
35.42
30.30
30.60
1,500
1,500
1,500.00
1,315.00
1,818.15
Kachere Rehabilitation
Centre
92
92
92.41
80.80
81.61
Malawi Investment and

Trade Centre
Malawi Broadcasting
Corporation
197
197
300.00
303.00
306.03
570
570
1,000.00
1,910.00
2,879.10
250
250
227.00
229.27
231.56
University of Malawi
Malawi Institute of
Education
National Library Services

National Unesco
Commission
Malawi National
Examination Board
Scholarship Fund
National Youth Council of
Malawi
Mzuzu University
National Commission of
Science and Technology
32
Category
Secretariat of the Public
Universities Working
Committeee
Lilongwe University of
Agriculture and Natural
Resources
Malawi University of
Science and Technology
Malawi Industrial Research
and Technology
2011/12
Approved
Estimate
2011/12
Revised
Estimate
2012/13
Estimates
2013/14
Estimates
2014/15
Estimates
120
120
120.00
121.20
122.41
450
450
2,850.00
2,878.50
2,907.29
500.00
500.00
500.00
100
100
100.00
89.89
90.79
Page 33
Financial Statement Annex 5: Revenue Overview (K)

2010/11
Approved
Estimate
2010/11
Outturn
2011/12
Approved
Estimate
2011/12 Likely
Outurn
2012/13
Estimates
36,910,271,583
40,620,472,830
42,775,376,688
43,154,402,560
53,155,031,201
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
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
205,000,000
329,933,954
225,641,727
358,238,251
440,544,822
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
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
TYPE OF TAX
1. PAYE
2. COMPANY TAX
5. VAT
6. MISCELLANEOUS
DUTIES
7. EXCISE DUTIES
8. OTHER TAXES
9. COLLECTION OF
ARREARS
10. PREPAYMENTS
34
308,956,268
787,251
(51,729,169)
TYPE OF TAX
11. COMMISSION
CHARGES
2010/11
Approved
Estimate
2010/11
Outturn
2011/12
Approved
Estimate
2011/12 Likely
Outurn
2012/13
Estimates
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

Rural Electrifciaction
Levy
5,625,000,000
6,122,260,653
6,862,236,327
4,017,346,272
4,283,288,930
3,546,597,814
3,225,411,573
3,525,956,632
7,882,244,984
601,574,066
1,700,000,000
1,157,156,884
1,844,999,996
Storage Levy
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
Page 35
Financial Statement Annex 6: Summary of Off-Budget Support to Malawi

OFF-BUDGET SUPPORT TO MALA WI 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
the Government of Malawi, they engage Government in different forms as outlined below:
a) The Government directly manages all project activities and implementation, as well as
directly managing all financing issues.
b) The Government directly manages project implementation and procurements, but not the
payments, which are made by the Development Partner agency.
c) The Government manages only the project implementation, while procurement and
payments are managed by the Development Partner organization.
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 Aid
Effectiveness 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 extrabudgetary support expected in 2012/13 Financial Year might be more than presented here since
projected support for several projects has not been provided by Development Partners.
36
Data Collection
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 extrabudgetary 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
Partners in 2012/13 Financial Year.
Summary Table of Direct Project Suppo rt from Development Partners

2012/13FY Proj.
I) DONOR SUPPORT TO GOVERNMENT AGENCIES
ON BUDGET (PART I DEVELOPMENT)
Grants
Loans
38,613,765,762
22,622,919,309
15,990,846,453
II) DONOR SUPPORT TO GOVERNMENT AGENCIES

OUTSIDE GOVERNMENT SYSTEMS
Grants
Loans
64,306,695,515
30,654,863,485
33,651,832,030
III) DONOR SUPPORT TO NON-GOVERNMENTAL

ORGANISATIONS
Grants
13,996,811,137
13,996,811,137
IV) TOTAL DONOR PROJECT SUPPORT

Grants
Loans
116,917,272,414
67,274,593,931
49,642,678,483
Page 37
Financial statement Annex 6: Summary of Off-Budget Support to Malawi

Project Title
Donor
Agency
Type of
Assistance
2012/13FY
Projection
Primary Sector
Project Title
Donor
Agency
Type of
Assistance
2012/13FY
Projection
Primary Sector
DONOR SUPPORT TO GOVERNMNET

AGENCIES OUTSIDE GOVERNMNET
SYSTEMS
GRANTS
LOANS
Unallocated
UNDP Support to Government
Institutions
64,306,695,515
30,654,863,485
33,651,832,030
3,328,548,888
UNDP
Grant
070 - Judiciary
Judiciary Support Project
110 - Ministry of Economic Planning
and Development
Social Policy, Research and
Participation
Macro-economic Advisory Service
project (next phase)
120 - Local Government & Rural

Development
Programme Support for Mangochi
District Council
Rural Infrastructure Development
Program PE 1 replenishment
Rural Infrastructure Development
Program PE 1 advance
Promoting democratic
decentralization (next phase ii)
Promoting democratic
decentralization (next phase iii)
Support to Smallholder farmers Union
of Malawi
Department of Agricultural Extension
Workers -Material Support
Improving food security and nutrition
policies and programme outreach
38
Multi-sector
81,855,460
DfID
Grant
81,855,460
Democratic
Governance
273,989,143
UNICEF
Grant
121,439,578
GDC
Grant
152,549,565
111 - National Statistics

Financial and audit services
3,328,548,888
Economic
Governance
Economic
Governance
20,909,850
Norway
Grant
20,909,850
Economic
Governance
5,108,853,212
ICEIDA
Grant
518,713,200
EU
Grant
1,092,580,800
EU
Grant
2,902,167,750
GDC
Grant
13,033,739
GDC
Grant
582,357,723
Integrated Rural
Development
Integrated Rural
Development
Integrated Rural
Development
Integrated Rural
Development
Integrated Rural
Development
1,924,668,441
FICA
Grant
13,646,334
Agriculture
FICA
Grant
231,076,742
Agriculture
FAO
Grant
407,128,135
Agriculture
Project Title
Strengthening Pest and Pesticides
Management Capacities in Malawi
Farm Income Diversification
Programme (FIDP) PE 2
Replenishment
FIDP PE2 advance
210 - Department of Irrigation &
Water Development
National water Development Program
- Trust Fund
Improving Water and Sanitation
Access in Blantyre
Irrigation, Rural Livelihood and
Agriculture Devt. (IRLAD)
250 - Education Science and
Technology
Initial Primary Teacher Education
(IPTE) II
Support to education sector response
to HIV
Support to Technical and Vocational
Education and Training (TEVET)
Support to Education Management
Information System (EMIS)
Support to mainstreaming of CFS
concepts in public primary schools
Early childhood development (ECD)
Basic Education
Youth Development
HIV Prevention for Adolescents
Construction of 3 TTCs in Rumphi,

Mchinji and Chikwawa
School feeding program
Improving Basic Education (Next
Phase)
Basic Education Programme (next
Phase)
Nutrition and access to education
(preparatory phase)
Primary school education (phase III)
Donor
Agency
Type of
Assistance
FAO
Grant
77,806,980
Agriculture
EU
EU
Grant
Grant
682,863,000
512,147,250
Agriculture
Agriculture
Primary Sector
13,399,737,775
AfDB
Grant
364,307,411
AfDB
Grant
67,600,364
World Bank
Loan
12,967,830,000
Water, Sanitation
and Irrigation
Water, Sanitation
and Irrigation
Water, Sanitation
and Irrigation
6,883,904,446
Canada
Grant
466,841,880
Education
UNESCO
Grant
20,748,528
Education
UNESCO
Grant
135,154,096
Education
UNESCO
Grant
5,187,132
Education
UNESCO
UNICEF
UNICEF
UNICEF
UNICEF
Grant
Grant
Grant
Grant
Grant
259,357
388,978,879
1,520,786,442
320,349,232
273,355,372
Education
Education
Education
Education
Education
BADEA,
OPEC, Saudi
Fund
GDC
Loan
Grant
2,827,500,000
103,691,314
Education
Education
GDC
Grant
24,734,878
Education
GDC
Grant
674,308,943
Education
GDC
GDC
Grant
Grant
30,650,407
91,357,985
Education
Education
270 - Finance
Institutional Support Project for PFM
Support for Aid Coordination
2012/13FY
Projection
1,366,755,402
AfDB
Norway
Grant
Grant
1,244,026,056
2,287,538
Economic
Governance
Economic
Page 39
Project Title
Statistical SWAp - senior long-term
advisor
Public Financial Management (PFM)
PE 1
Donor
Agency
Type of
Assistance
Norway
Grant
55,228,392
EU
Grant
65,213,417
310 - Health
Malawi/Norway/Germany Initiative on
maternal mortality
Essential Drug Project through UNICEF
Family Planning Commodities through
UNFPA
Construction of Nkhatabay District
Hospital
Construction of Phalombe District
Hospital
Health Sector Support
Maternal, Neonatal and Child Health
Promotive, preventive & curative
nutrition
PMTCT & Pediatric HIV Treatment and
Care
Water, Hygiene and Sanitation
Improving access to high quality
comprehensive HIV-related services in
Malawi
Promotion of sustainable structures
for Health Delivery Services (next
Phase)
Promotion of mothers health
(preparatory phase)
Accompanying measures to the
contribution to the Health Sector
SWAp
2012/13FY
Projection
12,786,084,085
Norway
Grant
855,212,865
Health
DfID
Grant
1,049,746,343
Health
DfID
Grant
OPEC
Loan
794,198,479
Health
BADEA
WHO
UNICEF
Loan
Grant
Grant
518,713,200
748,321,598
1,234,170,426
Health
Health
Health
UNICEF
Grant
1,835,784,889
Health
UNICEF
UNICEF
Grant
Grant
925,918,623
1,614,541,519
Health
Health
CDC
Grant
1,447,680,000
Health
GDC
Grant
459,756,097
Health
GDC
Grant
23,729,348
Health
GDC
Grant
459,756,097
Health
320 - Gender, Child and Community

Development
818,554,600
Norway
Grant
102,458,265
Child Protection
UNICEF
Grant
1,565,919,159
Partnership for Child Protection
UNICEF
Grant
39,316,645
40
Health
1,707,694,069
Women and equal opportunities
340 - Home Affairs and National
Primary Sector
Governance
Economic
Governance
Economic
Governance
Gender, Youth
Development and
Sports
Gender, Youth
Development and
Sports
Gender, Youth
Development and
Sports
20,769,277
Project Title
Defense
Refugee Support
Donor
Agency
Type of
Assistance
UNHCR
Grant
360 - Tourism, Wildlife and Culture

Support to intangible cultural heritage
2012/13FY
Projection
Primary Sector
20,769,277
8,429,090
UNESCO
Grant
420 - Road Fund Administration
8,429,090
Tourism, Wildlife
and Culture
16,543,590,351
Nacala corridor project
AfDB
Loan
Liwonde - Naminga Road
OPEC
Loan
Karonga - Chitipa
P.R.C.
Grant
Zomba -Jali- Kamwendo- PhalombeChitakale road
OPEC &
BADEA
Loan
4,524,970,000
Thyolo- Thekerani- Mouna - Bangula
BADEA &
Kuwait
Loan
3,729,375,000
Jenda -Embangweni-Edingeni-Euthini
ADFD
Loan
4,704,750,000
Ntcheu- Tsangano- Mwanza Feasibility

Study
AfDB
Loan
219,929,225
Zomba - Blantyre road
AfDB
Loan
1,652,723,121
470 - Natural Resource, Energy and

Environment
1,711,843,005
Road, Public
Works and
Transport
Road, Public
Works and
Transport
Road, Public
Works and
Transport
Road, Public
Works and
Transport
Road, Public
Works and
Transport
Road, Public
Works and
Transport
Road, Public
Works and
Transport
Road, Public
Works and
Transport
641,807,526
Lake Chirwa Basin Climate Change

Programme
Norway
Grant
292,737,900
Enhancing community resilience to

climate change programme
Norway
Grant
209,098,500
African Adaptation programme
WFP
Grant
139,971,126
Electoral Commission
Electoral Support
Democratic
Governance
Environment,
Lands and Natural
Resources
Environment,
Lands and Natural
Resources
Environment,
Lands and Natural
Resources
209,098,500
Norway
Grant
209,098,500
Democratic
Government
Page 41
Project Title
Donor
Agency
Type of
Assistance
DONOR SUPPORT TO NONGOVERNMENTAL AGENCIES

Microloan foundation Support
Support to Trustees of Agriculture
Promotion Programme (TAPP)
Malawi Milk Production Association
Malawi Organic Growers Association
(MOGA)
Malawi Economic Justice Network
(MEJN) support
Support to NASFAM
Support to farmers Union of Malawi
Promoting Conservation Agriculture
and Sustainable Crop production in
smallholder systems (NASFAM)
USAID initiative for long term training
capacity building in Malawi
Kulera Biodiversity Activity
Malawi Smallholder Dairy
Development program
Support to NASFAM Strategic
Development Programme III
SCC - Malawi's Lake Basin Programme
Phase II
Technical Assistance under southsouth cooperation with the P.R. of
China in ASWAP in Malawi
Purchase for progress
NCA prevention of Human trafficking
Phase II
2012/13FY
Projection
Primary Sector
13,996,811,137
FICA
Grant
13,653,163
Agriculture
FICA
FICA
Grant
Grant
6,350,626
34,143,150
Agriculture
Agriculture
FICA
Grant
6,828,630
Agriculture
FICA
FICA
FICA
Grant
Grant
Grant
13,602,631
13,646,334
13,575,316
Agriculture
Agriculture
Agriculture
Ireland
Grant
56,550,000
Agriculture
USAID
USAID
Grant
Grant
45,240,000
72,987,200
Agriculture
Agriculture
USAID
Grant
22,115,348
Agriculture
Norway
Grant
752,754,600
Agriculture
Norway
Grant
29,273,790
Agriculture
FAO
WFP
Grant
Grant
129,678,300
225,186,368
Norway
Grant
146,368,950
Support to constitutional bodies

UNDP - Democracy consolidation
programme Phase 4
CHRR/CEDEP promotion of Lesbian,
Gay, Bisexual, and Transgender (LGBT)
rights in Malawi
DfID - Tilitonse Civil Society
Governance Fund (CSGF)
Norway
Grant
146,368,950
Norway
Grant
167,278,800
Agriculture
Agriculture
Democratic
Governance
Democratic
Governance
Democratic
Governance
Norway
Grant
39,519,617
Norway
Grant
250,918,200
Social Protection
UNICEF
Grant
436,438,024
Planning RBM and HRBA Capacities

Interactive radio institution
Malawi teacher professional
development support activity
UNICEF
USAID
Grant
Grant
124,231,293
157,921,757
Democratic
Governance
Democratic
Governance
Economic
Governance
Economic
Governance
Education
USAID
Grant
197,925,000
Education
42
Donor
Agency
Type of
Assistance
USAID
Grant
63,360,000
Education
Norway
Grant
71,093,490
Mountain Biodiversity Increase

Livelihood Security (MOBILISE)
USAID
Grant
58,359,600
Support to Mount Mulanje

Biodiversity Conservation Trust
Norway
Grant
209,098,500
CELA improving prison conditions for

women and youth II
Norway
Grant
112,913,190
Joint UN Programme on Adolescent

Girls in Malawi
Norway
Grant
244,394,327
NGO- Gender coordination network

Phase III
Norway
Grant
167,278,800
Norway
FICA
UNHCR
Grant
Grant
Grant
230,008,350
54,629,040
75,665,936
Energy and Mines

Environment,
Lands and Natural
Resources
Environment,
Lands and Natural
Resources
Gender, Youth
Development and
Sports
Gender, Youth
Development and
Sports
Gender, Youth
Development and
Sports
Gender, Youth
Development and
Sports
Health
Health
USAID
Grant
292,985,550
Health
USAID
Grant
292,985,550
Health
USAID
Grant
292,985,550
Health
USAID
USAID
Grant
Grant
292,985,550
292,985,550
Health
Health
USAID
Grant
19,792,500
Health
USAID
Grant
617,843,358
Health
USAID
Grant
22,620,000
Health
USAID
Grant
48,067,500
Health
USAID
USAID
Norway
Grant
Grant
Grant
705,461,250
105,183,000
660,893,614
Health
Health
Health
Project Title
Education decentralization support
activity
Extractive Industries Transparency
Initiative (EITI) National Workshop
support -GIZ
MHRRC Response to Gender Based

Violence
Support to Banja La Mtsogolo
Refugee Support
Communicating Networking &
Capacity building to effectively
respond together (CONTERT)
Support for Integrated System
Delivery-Excellence (SSDC-E) program
National distribution and
management of Long Life Insecticide
treated nets
Malawi: Civil Society Support Program
for Local Governance
In-door residual spraying
Capacity support for early childhood
development and Psycho-social
support
Extending quality improvement for
HIV/AIDS in Malawi
Maternal Child Health Integrated
Program -MCHIP
Intermittent preventive treatment of
pregnant women
Deliver task order 1-host country
strategic information capacity
Procurement of contraceptives
NCA Access to quality health care
2012/13FY
Projection
Primary Sector
Page 43
Donor
Agency
UNAIDS
Type of
Assistance
Grant
UNAIDS
Grant
129,678,300
UNESCO
Grant
3,112,279
UNESCO
Grant
1,685,818
UNESCO
Grant
3,112,279
UNESCO
Grant
5,187,132
UNESCO
Grant
6,224,558
UNESCO
Grant
3,112,279
UNESCO
Grant
648,392
Information
Technology
Information
Technology
Information
Technology
Information
Technology
Information
Technology
Information
Technology
Information
Technology
WFP
Grant
2,912,598,998
Multi-sector
Canada
Grant
985,555,080
Multi-sector
COSOMA Culture Support Scheme II
Norway
Grant
83,639,400
Red Cross Malawi support project
FICA
Grant
56,905,364
Assistance to refugees
WFP
Grant
274,147,707
Tourism, Wildlife
and Culture
Vulnerability,
Disaster, and Risk
Management
Vulnerability,
Disaster, and Risk
Management
CRS -WALA: Land and water

management
USAID
Grant
1,367,379,000
Water, sanitation
and Irrigation
Project Title
HIV related support
HIV and AIDS related support

Campaign for the enactment of access
to information legislation (MISA
Malawi Chapter)
Training of Journalists in election
coverage
Training of Journalists to reinforce
human rights and gender
Establishment of the USISYA
Community Radio Station
Establishment of Nsanje/Chikwawa
Radio Station
Strengthening capacity of
independent private radio stations
World Press Freedom Day
Commemoration (MISA)
Country programme (Support to
Education, Nutrition support and
Disaster risk reduction and food
security)
Support to NGOs, and other
organizations
44
2012/13FY
Projection
129,678,300
Primary Sector
Health
Health, Nutrition,
gender, and local
government
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Budget Document No.

2012/13 Financial Statement

2012/13 Financial Statement

Ministry of Finance 2012/13 Financial Statement

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

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

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

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

Ministry of Finance 2012/13 Financial Statement

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

Ministry of Finance 2012/13 Financial Statement

Abbreviations and Acronyms

African Development Bank

Department for International Development

Farm Input Subsidy Programme

Gross Domestic Product

International Monetary Fund

Key Priority Area

Local Development Fund

Lilongwe University of Ag riculture and Natural Resources

Millennium Development Goal

Malawi Growth and Development Strategy

Malawi Revenue Authority

Medium-Term Expenditure Framework

Malawi University of Science and Technology

National AIDS Commission

Other Recurrent Transactions

Public Financial Management Act

Sector Wide Approach

United States Agency for International Development

Ministry of Finance 2012/13 Financial Statement

Ministry of Finance 2012/13 Financial Statement

THE 2010/11 FISCAL YEAR PERFORMANCE

Ministry of Finance 2012/13 Financial Statement

Revenue and Grants

Total expenditure, Net lending and

Wages and salaries

Ministry of Finance 2012/13 Financial Statement

Domestically financed projects (Part II)

Foreign financed projects (Part I)

Overall balance (including grants)

Revenues and Grants

Ministry of Finance 2012/13 Financial Statement

Figure 1: 2010/11 Domestic

Grants inn 2010/11 Fiiscal Year w

Ministry of Finance 2012/13 Financial Statement

Year were eestimated at K297 billioon comprisinng K216.9 billion

Ministry of Finance 2012/13 Financial Statement

Total Reecurrent Exp

K20.1 billion. The

Ministry of Finance 2012/13 Financial Statement

Ministry of Finance 2012/13 Financial Statement

THE 2011/12 FISCAL YEARPERFORMANCE

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

Revenue and Grants

Ministry of Finance 2012/13 Financial Statement

Total Expenditure, Net lending and

Wages and salaries

Part II (domestically financed)

Part I (foreign financed)

Overall balance (including grants)

Total financing (net)

Ministry of Finance 2012/13 Financial Statement

Net domestic debt