Presenting his financial outline in Parliament on Friday, Mlusu allocated US$514.5 million or 21.6 percent of the budget to the education sector. This translates to 5.4 percent of the gross domestic product (GDP).
The minister said the allocation to education would cater for salaries of teachers, operational costs of primary and secondary schools and pay for development projects in the sector.
Agriculture, once considered a priority in previous budgets, came second with a US$474 million allocation or 19.9 percent of the budget – representing five percent of GDP.
The minister said his government intended to spend part of the agriculture sector’s budget in implementing the newly-introduced Affordable Input Programme (AIP) targeting 4.2 million poor farming families who are expected to access subsidised fertilisers and maize seeds.
The objective of AIP, a pledge by the Tonse Alliance government of President Lazarus Chakwera during campaigns for elections held in June, is to boost food production in the next farming season, he added.
Malawi has had such subsidised fertiliser and seed programmes in the past six years but the harvests felt short of food self-sufficiency among the targeted farmers, leaving over two million people in need of food-aid this year alone.
The country’s troubled health sector, which has been limping along due to shortages of drugs, was allocated US$273.5 million – taking 11.5 percent of the budget or 2.9 percent of the GDP, Mlusu told parliament.
The 2020/21 budget has increased by 22.9 percent from the 2019/20 total budget of US$2.3 billion which had a deficit of US$742.3 million at the end of the financial year, he said.
The minister noted that the outbreak of Covid-19 affected the performance of the previous budget, hence the deficit that is being reflected in the current outline.
Mlusu also noted that the country’s revenues had substantially declined amid increased need for resources to mitigate the effects of the pandemic.
During the same period monthly tax revenue collections dropped by nearly 11 percent when compared to revenue collections during the pre-Covid-19 period, he added.
Parliament meets on Monday to debate the budget statement before approval.