Treasury

Treasury comprises five divisions namely Economic Affairs, Revenue Policy, Debt & Aid, Administration and Budget:

  1. Economic Affairs Division
    The Economic Affairs Department (EAD) is the Government’s think tank responsible for policy analysis on a wide range of issues including: fiscal and monetary policies, financial sector reforms, public enterprise management and economic integration. It coordinates the preparation and monitoring of national budget, the monitoring and analysis of macroeconomic performance especially relating to fiscal and monetary policies, the regulation of financial institutions and the coordination of development of regional economic policies

    It is responsible for ensuring that policy advice is targeted at achieving the strategic objectives as spelled out in the Malawi Growth and Development Strategy (MGDS) namely creating wealth through sustainable economic growth and infrastructure development as means of achieving poverty reduction. The main purpose of the Department is to provide short to medium – term economic, fiscal and monetary policy services to the Minister of Finance and the Secretary to the Treasury (ST) in collaboration and consultation with relevant institutions and partners

    The core functions of the Economic Affairs Department include:

    • The preparation and review of the National Economic Programme;
    • The coordination and preparation of annual short to medium – term economic and fiscal policy statements and updates;
    • Advise the Minister of Finance and the Secretary to the Treasury on short to medium – term economic, fiscal and monetary policies;
    • Monitoring and analysis of macroeconomic performance especially relating to fiscal and monetary policies;
    • Conducting public finance management policy studies;
    • Coordinating policies in the financial sector including such areas as: banks, non – bank financial institutions, micro-finance, insurance industry, pension funds, asset management, debt market, payment systems, anti-money-laundering, credit reference systems, foreign exchange markets, retirement and money transfer systems;
    • Monitor the financial performance of public enterprises; and
    • Facilitating regional economic integration initiatives within Southern Africa Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA), and African Union (AU).

  2. Revenue Policy Division
    The Revenue Policy Division was established in March 2006 with the responsibility of policy formulation and oversight as regards mobilization and management of Government revenue. Emanating from a Tax Policy Unit in the Economic Affairs Division, the division was formulated to expand its scope and emphasis from managing the mobilization of tax revenue to management of both tax and non-tax revenue due to the Government.

    The mandate of the Division is set out in Article 8 subsection (g), of the Public Finance Management Act, which gives responsibility to the Secretary to the Treasury of collecting revenue owing to the State. Under this mandate, the Division is to analyze and formulate policies for the efficient and effective collection and management of Government revenue.

    The main objective of the Division is to provide policy guidance through the designing of efficient and effective revenue systems that guarantee the generation of adequate public resources to meet Government’s expenditure obligations.

    Specific Objectives:

    • To achieve a tax and non tax revenue system that would significantly reduce donor dependency and aid,
    • To devise a tax system that allows Government to generate adequate financial resources for the financing of necessary expenditure obligations whilst facilitating strong economic growth,
    • To provide adequate tax and non tax revenue bases to achieve millennium development goals,
    • To achieve revenue systems which are fair, equitable and sustainable,
    • To ensure that efficient and effective revenue collection and management systems are adhered to by all revenue collecting units, in line with the laws of the State,
    • To be a rapid response entity on all revenue issues in Malawi.

    The Division is headed by a Director at P2 (Grade C) level in the Government salary structure. There are two posts of Deputy Directors under the Director, one responsible for tax policy and another in-charge of non-tax revenue policy oversight. The activities of the Division can be further subdivided into three broad categories, namely:

    Policy Review and Planning Functions
    The major tasks that fall under this functional category are:

    • Designing revenue policies that support Government’s development policies and private sector growth,
    • Evaluating the impact of tax policies on the tax base and domestic revenues,
    • Evaluating the economic and revenue impact of existing tax policies such as tax expenditure accounts and efficiency analysis,
    • Developing and maintaining revenue and receipt estimating models for forecasting tax revenues,
    • Formulating annual Government tax and non-tax revenue budget estimates and forecasts for the Minister’s presentation to Parliament,
    • Conducting macro and micro simulation links and forecast models with emphasis on behavioural aspects of various revenue components of Government for policy guidance,
    • Examining Government’s membership to regional and international organizations and the implications thereof pertaining to agreements on revenue implications,
    • Advising other Ministries, notably the Ministry of Commerce and Industry and Malawi Investment Promotion Agency, on trade and investment policies which may impact on Government revenue.

    Operations, Monitoring and Evaluation Functions
    The key tasks under this category are;

    • Oversight of adherence to efficient and effective revenue collection and management systems by all revenue collection bodies. This is done through monitoring of both tax and non-tax revenue performance in line with existing targets and preparation of management reports,
    • Creation, maintenance and updating of tax and non-tax revenue data bank for policy design purposes,
    • Advising and consulting all revenue collecting Ministries and Departments on Government’s new policy directions and appropriate rates of user fees, licensing fees and Government service charges,
    • Participating in the budget formulation process and liaising with all other Departments of the Ministry of Finance to ensure a coordinated formulation and management of the National Budget Framework,
    • Facilitating the drafting and processing of taxation and user fees amendments to the regulations through the Ministry of Justice to ensure that the amendments are enacted and gazetted,
    • Coordinating with line Ministries, Government Departments and Malawi Revenue Authority on issues impacting on revenues and provide necessary advice,
    • Assessing the eligibility and facilitating the processing of applications for visas and work permits from Government Technical Assistance personnel and other organizations that have an agreement with Government.

    Legislative Oversight Functions
    The tasks under this subcategory provide backstop legal services to the Division’s functions. The tasks are:

    • Analyzing, reviewing proposed legal provisions on revenue laws,
    • Drafting of Government Bills, Gazette Notices and Corrigenda,
    • Providing impacts on disputes regarding interpretation of tax laws,
    • Negotiations on tax related agreements, thus Avoidance of Double taxation Agreements and Investment Promotion and Protection Agreements,
    • Advising on tax and non-tax policy reforms.

  3. Debt and Aid Management Division
    The Debt and Aid Management Division (DAD) in the Ministry of Finance is the main agent of Government responsible for managing the foreign aid and public debt portfolios. The creation of DAD in 1997 brought under one umbrella all the debt and Aid management functions which were previously performed by various Government Departments and agencies such as the Accountant General, Ministry of Economic Planning and Development, Ministry of Finance, Ministry of Foreign Affairs and the Reserve Bank of Malawi. DAD comprises of four Units, three of which deal with various debt management functions from loan contraction, debt analysis and debt recording and payments.

    The main functions of these DAD Units are outlined below:

    Resource Mobilization Unit
    The Resource Mobilisation Unit, also known as Front office, is responsible for designing and implementing the Governments external funding programme. Specifically, it is responsible for sourcing external financing such as loans, grants and other forms of funding. The main functions of the Unit are:

    • Evaluate proposals for new financing from development partners;
    • Analyzing all the markets in which the Government can source funding;
    • Communicating with development partners;
    • Monitoring financial flows to ensure that Government derives maximum benefits from the external resources.

    Planning and Information Unit
    The Planning and Information Unit, also known as the Middle Office, is responsible for conducting analytical work for strategic debt and aid management. The purpose is to achieve the most suitable balance between costs and risk in the Governments financing. The main functions of the Unit are:

    • Prepares and monitor implementation of government’s debt and aid policy and strategy;
    • Prepare periodic reports on the country’s debt and aid portfolio;
    • Provides information on donor commitments to the annual Government budget;
    • Conduct periodic debt sustainability analyses.

    Disbursements and Debt Servicing Unit
    The Disbursements and Debt Servicing Unit, also known as the Back Office, is responsible for maintaining an up-to-date aid and debt database which allows for timely registration of aid and debt flows, disbursement, servicing and accounting. The main functions of the Unit are:

    • Maintain a database on public debt and aid information and;
    • Monitor the disbursements of grants and loans;
    • Ensure timely and accurate debt service for both Government and parastatals;
    • Monitoring the financial/physical performance of donor funded programmes and projects.


    Development Assistance Coordination Unit (DACU)
    The Development Assistance Coordination Unit was created in 2006 to lead the implementation of the agenda on Aid alignment and harmonization as per the Paris Declaration on Aid effectiveness. Specifically, the ACU will help strengthen coordination between Government and development partners and within Government Ministries and Departments on Aid Management issues. In accordance with the principles of the Paris Declaration, the central theme of the ACU will be to identify best practices in Aid coordination, define the roles of various actors in the Aid relationship and define the principles of donor funding, coordination, alignment of donor resources to the Malawi Growth and Development Strategy (MGDS)

  4. Administration Division
    The purpose of this section is to provide administrative and office utility services to the ministry. To achieve the purpose the section carries out the following functions:

    • Provides office services and supplies;
    • Fleet management
    • Procurement, warehousing and distribution of stores and equipment for the Ministry’s needs.

  5. Budget Division
    The Budget Division manages the allocation of national resources sustainably. This is achieved through the management of the government national budget and the resource allocation to public sector institutions.

    Budget Planning Section
    The Section provides professional advice and technical guidance on government expenditures. Specifically, the Section performs the following functions:

    • Determine Government expenditure ceilings in the medium term framework in line with the resource envelope in collaboration with other relevant stakeholders;
    • Provide professional advice to Ministries and Departments on the establishment and identification of objectives, definitions of outputs and activities to be undertaken;
    • Provide technical advice to Ministries and Departments on budget preparation so as to ensure that estimates are submitted in line with national priorities and ensure compliance with Government policies;
    • Facilitate the implementation of budget related reforms in line with international best practices; and
    • Provide professional advice and assistance to Cabinet on the Management of Budget Preparation, Monitoring and Implementation.

    Budget Cash Flow Management
    The Section analyzes and monitors finances of Government in order to ensure that expenditures incurred are in line with the resource envelope and approved budget estimates. Specifically, the section performs the following functions:

    • Analyzes and monitors cash flow of Ministries and Departments;
    • Provide professional advice to Ministries and Departments on cash flows in order to smoothen expenditure within the financial year;
    • Provide information and advice to the Budget Director on any cash flow problems and recommendation on measures of dealing with such situations; and
    • Prepare reports on cash flow patterns of Government Ministries and Department to the relevant authorities.

    Monitoring and Evaluation
    To ensure efficiency and effectiveness, the section is divided into sectors; these are Social, Economic and General Administration and Governance.
    Monitoring and Evaluation Section is responsible for;

    • Ensuring that there is budget expenditure discipline in line with the Public Finance Management Act (2003);
    • Monitoring and analyzing utilisation of funds on both recurrent and development budget in light of budget targets;
    • Consolidating data needed for budget progress reporting and meaningful annual budgeting and evaluation;
    • Physical monitoring of public projects and analysing implementation of the set targets; and
    • Assisting Ministries and Councils in the budget preparation process
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