The European Union (EU) has denied local press reports that budget finance to aid-dependent Malawi has been cut.
Malawi News reported on Saturday that EU has withdraw its aid to Malawi following a widespread multi-million dollar treasury fraud.
But Alexander Baum, the head of the EU mission in Malawi denied the report, saying EU will make its disbursement of the pledged budgetary support of $39m in December but that the release will depend on how government deals with the ‘cash-gate’ crisis at Capital Hill.
“The EU is currently not withholding any aid to Malawi,” said Baum in a statement refuting Malawi News story.
“In order to continue with the implementation of our ongoing budget support programme, the Government needs to make use of the time until the next disbursement is due to rectify the current deficiencies in the system and establish confidence in the management of public funds. We have confidence that this can be done,” he added.
President Joyce Banda has vowed to carry out a forensic audit to ascertain the level of fraud and corruption in the public sector.
Before the financial scandal was unearthed, President Banda has asked Britain to assist with external auditors which London has responded favourably.
Malawi Finance Ministry’s Budget Director, Paul Mphwiyo who was on the verge of busting a corruption ring, was last month shot and seriously wounded by a gunman in what Banda suspects was a targeted attack to silence him.