Ministry of Local Government, National Unity and Culture says the K3.2 billion councils were due to receive in the last financial year remains estimates, not arrears as it is due to resource constraints.

Secretary for Local Government Richard Hara said this in an interview in the wake of councils’ concerns that they 20 councils were still owed about K3.2 billion for the 2023/24 fiscal year despite several queries to the Treasury.

He said authorities were aware of the problem and will be addressing the issues as time goes, insisting that councils should know that the government budget is only an estimate.

Said Hara: “Being an estimate, it does not mean that an MDA [ministry, department and agency] will be financed 100 percent. If it has been financed less, it means it’s within the powers of the Ministry of Finance to see how best they can redistribute the resources.

“As Local Government, we could have preferred to be financed in full, but it remains an estimate, the resource envelope is small.”

In the current 2024/25 fiscal year, no council has received funding since April, with the Malawi Local Government Association (Malga) stating that they want to engage Treasury as the situation is affecting operations of the councils.

But the ministry promised that the government will address scanty funding as time goes.

The K3.2 billion comprises K389 million for District Development Fund (DDF), K1.3 trillion for Other Recurrent Transactions (ORT), K171 million for Water Structure Fund, K975 million for Constituency Development Fund and K366.3 million for city roads.

Malga executive director Hadrod Mkandawire said councils’ operations continue to be affected, and most of them are surviving on debt, which was becoming unsustainable.

He said: “So, 20 local authorities have been affected for the previous year, and history informs us that the government does not pay the arrears. This is what leads to councils accumulating huge arrears.

“As for this financial year, I have checked, and as of last Friday no council had received funding. We are keeping our fingers crossed for the proposed meeting by the Secretary to the Treasury to address this once and for all.

The analysis shows that the arrears date back to June 2023.

Parliamentary Local Authorities and Rural Development Committee chairperson Horace Chipuwa said they are expected to meet councils and the ministry over the matter on Wednesday.

He said:  “We are pursuing that matter from Wednesday. So, I can ably answer the questions after that discussion. We will meet both councils and officials from the Ministry of Local Government.”

Secretary to the Treasury Betchani Tchereni said the Accountant General Henry Mphasa was better-placed to respond on the matter. However, Mphasa did not respond to our phone calls, or WhatsApp messages yesterday.

However, last month, Tchereni said his office was also getting similar queries from MDAs.

In the 2023/24 National Budget, Treasury has allocated K488.1 billion to local councils. Out of this, K379.2 billion is for personal emoluments, K60.4 billion is for development projects while K48.4 billion caters for ORT.

Malawi has 35 local government councils comprising four cities, three municipalities; namely, Luchenza in Thyolo, Kasungu and Mangochi and 28 district councils.

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