Budget row doesn't threaten Malawi spending - finance minister

Malawi government spending can continue for up to four months if the opposition-led parliament does not adopt the budget by July 1, the start of the new financial year, its finance minister said on Monday.

However Goodall Gondwe warned that donors could be dissuaded from advancing funds if the impasse over the 2008/09 budget caused by a political feud continued.

The southern African country's President Bingu wa Mutharika on Friday suspended parliament until opposition legislators give him guarantees that they will adopt the budget.

"If the budget is not passed by July 1, I will have to spend for four months on essential services without parliament approval because the law allows me to," Gondwe told Reuters.

The opposition alliance of United Democratic Front (UDF) and Malawi Congress Party say according to the constitution wa Mutharika's Democratic Progressive Party should lose 60 legislators he is accused of poaching when he quit the UDF.

But analysts said that the finance minister may still need parliament's permission to let him to spend.

"He will still need parliament because the law says that even in such a case, he will have to ask parliament to authorise him to withdraw from the consolidated fund for government to meet expenditure necessary to carry out services for only four months," Edwin Banda, a constitutional lawyer said.

Wa Mutharika's decision to suspended parliament has been widely condemned by public interest groups and the opposition because it deepens a political crisis and threatens mediation talks led by the Catholic Church to resolve the impasse.

There are fears that failure to pass the budget may undermine donor confidence.

"Delaying passage of the budget would not only affect the fertilizer subsidy programme meant for the poor but it would also have the potential of diminishing donor aid," Gondwe said.

The draft 2008/09 budget allocates more resources to the agriculture sector with more spending on food production and health care, and proposes 20 percent salary increases for civil servants.

The political crisis delayed passage of the budget last year until pressure from the international community and civil society forced opposition legislators to back down.