EU rules out budgetary support for Malawi

European Union (EU), one of Malawi’s largest donors, has ruled reinstating budgetary support any time sooner even the country meets the IMF extended credit facility.

Finance Minister Gondwe: Tough times

Finance Minister Gondwe: Tough times

A senior EU official from Brussels who is in the country said Friday, Malawi has a lot to do to ensure that donor money is not looted as was the case with the infamous ‘cashgate’ scandal.

The official, Fernandes Ahnies said the government of Malawi will continue getting EU aid through the development aid which has since been increased by 220 million Euros, hitting 560 million Euros.

The official said the money will continue being used in the sectors of agriculture, health and good governance.

The revelation has not come as a surprise in government corridors of powers as President Peter Mutharika and Finance minister Goodall Gondwe have openly ruled out the return of most donors for the budgetary support, whose pull out has adversely affected the economy which is fast collapsing.

Ministry of Finance spokesperson Nations Msowoya said the government is widening its tax base to fill the gap left by donors.

“We are looking at how best to tax the informal sector,” said Msowoya pointing fingers at the untaxed unskilled labour which forms a bulk of the Malawi economy

. Msowoya said soon the government will commission a study on this which will be led by experts from the IMF and World Bank. He could however not say how much new taxes the government is expected to collect, saying everything would be known after the study.

On Thursday, renowned economist Henry Kachaje warned local businessmen to avoid getting bank loans in the wake of high interest rates and high inflation due to a slump in the economy.

Speaking on MBC, Kachaje said: “This is not the best time tto be borrowing from banks.”

Finance minister Gondwe has since urged Malawians to hold their patience, saying the government is doing all it can to fix the ailing economy.

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39 thoughts on “EU rules out budgetary support for Malawi”

  1. Winston Msowoya says:

    Ndithudi Nabetta,mwanena zoona kwambili.Why do we hate each other like that.Makolo Attu anali kukondana kwambili kunalibe zakuti aTumbuka,aChewa,aLomwe na zina.We are failing to address authentic and real issues which truly affect our lives.We must get united in the middle of economic catastrophe.How would people beyond our borders look at us? As it is now,it is not only one region that bears the blunt of the economic downfall,but all three regions are victims of lack of food.Under these circumstances,we need real unity and resilience to combat deadly economic and political bankruptcy.We have the will and capacity to get out of the common threat.UNITY IS STRENTH!!!0

  2. Mlauzi says:

    Greece brought the problem upon themselves. Malawi is an interesting country. Everybody is crying for donor support nobody is coming up with innovative ideas about how to get out of this shit hole. Why is Asia not suffering? They have learnt to do without begging. How on earth can theft of USD24 million make a whole country poor. If theft was an impediment then Kenya could have collapsed bearing in mind that it lost USD860 MILLION. We are just dull as people.

  3. Kaziulika Chimugonda says:

    I have a problem with those who say, tisadalire EU koma tikonde dziko lathu. I want those people to advise Govt. to stop looting first then tell us to love our country. Govt seeks to broaden taxation base. What about Amwenye amene akupatsidwa waver on luxury cars. Are we serious? President ndi Ndunaayambe kukhoma mtsonkho kuti tikhulupirire. Amwenye onse azikhomanso mtsonkho popanda katangale. Malawi should not be a Manor Farm (Animal Farm) where some are more equal than others.

  4. Winston Msowoya says:

    I think Kakha Erutu had written his views just after waking up from a nap.So he wants our dedicated Journalists and reporters to write bunkum? Bravo our Journalists and Reporters you are just responsible and authentic sons of our beloved Malawi.Erutu’s comments prove that he is living in a deferent world.It is egregious for Eruru to uphold evil which is devouring our nation and our decorum.The present regime is bent on stifling our identity that will have a devastating future for our children and the following generations.Mr.Erutu,it is indeed,democratic to share your views and it is also democratic to the views of others.Malawi belongs to us all and we will not sit and fold our hands if the leader goes out of steam.Right now something is terribly wrong and it must be straighten to meet the demands of the overwhelming masses of our people.EU nations are the most powerful economically and they know precisely well that Malawi’s public funds are terribly misused by Muthalika and his gang of looters.According to the recent report by the international index is that Malawi is fast running to be on top of ten corrupt nations In Africa.Hitherto,Malawi is second to gigantic Nigeria which had earlier this year,officially declared that the government of Nigeria declared that the ” State went into disfunctional status”,and the Head of State had to loyally asked for financial assistance from IMF ( INTERNATIONAL MERCILESS FOTRESS).When you talk of the Nigerian Government,you talk of billions of budgetary footing.Candidly,Nigeria could not have found herself in that shameful situation.Nigeria’s oil output brings into government coffers more than $ 5 billions a day.Malawians,take heed!!

  5. nabetha says:

    Kodi abale mumawerenga zimene EU inawapanga abale awo aku Greece. Tamawerengani kuti mudziwe mmene adawakhaulitsira kuti mumvetse kuti alibe nanu ntchito.
    Akulu adati chimanga chopempha samanga nacho NKHOKWE. Anthu okonda mtundu wawo sangamalilire anthu adera. Asiyeni azungu sakufuna kukuthandizani. Tiyeni tipemphere kuti ambuye atipatse mtima okonda DZIKO LATHU. Kuti tithe kuzidalira tokha.

  6. Mytake says:

    It is obvious donors intensely dislike the Peter Mutharika DPP govt because of the terrible history of DPP. Peter Mutharika is a disaster for Malawi.

  7. Nambewe says:

    I think politics and development are in the same vein and they work together. If the two were separate cash get would have simply been a political matter but how can you say not having drugs in hospitals which is caused by political misappropriation of funds is only development? who makes policies that affect development?

    No what needs to change is the Malawian mind set! Be angry properly! Demand standards that are befitting of a human being! and get broad minded to understand that if you steal you will not get rich you will simply delay DEVELOPMENT!

  8. American says:

    As an American I hope America NEVER GIVE MALAWI ANOTHER DOLLAR!
    Leave this ignorant, lazy, arrogant and Evil country to help themselves
    They even want our money without conditions!…
    Shit hole of a place

  9. Mneneli says:

    Hmmmm!!! There is hypocrisy here. Tell me, are NGOs or whichever channel of transmitting the aid money that the EU and other donors are talking about better placed to trace and prevent fraud than Government machinery? Which, between the two, has better facilities, resources and human capital to deal with fraud? A Malawi, let’s distinguish between politicians and a government system. Politicians come and go. We elect and de-elect them every 5-years. Amongst them there are genuine state persons and there are thugs. Unfortunately most of them belong to the later because they did not go far with their education to compete on the same footing with genuine citizens who are there to serve the masses with honesty! I personally don’t subscribe to what the EU and others are stating as the reason for not supporting Malawi at this moment in the history of Malawi. Granted, they have scores to settle with the current regime. May be, because of its links to the previous regime of Bingu. But the unfortunate thing is that the ordinary poor Malawian is the one who is suffering. This does not bother them because they are not and let alone have any relations with the poor Malawian majority. To them, the suffering Malawians are just a statistic. Reducing the size of a civil service is not a solution. What is the proportion of the entire civil service to Malawi’s population? The solution to Malawi’s problem and indeed any country including the United States of America, Britain and the EU member countries is not creating un-employment! But, creating employment. We don’t have to create a social welfare state where people, even those that went to school, will have to depend on hand-outs. Malawians, let’s learn to separate politics from development. If we fail to see the two as different, we will not develop. I believe that it is not difficult for IMF, World Bank and the EU to help Malawi which has embraced democracy to build her systems and structure to deal with fraud. The fact that we have the ‘Cash gate case’ going on, not forgetting the Bakili Muluzi case and the MK557 billion audit query during Bingu’s reign is testimony enough to indicate that investment in the public sector governance system is the best way forward to check the corrupt practices of our politicians. We don’t have to unnecessarily punish the innocent poor Malawians!

  10. mtochi says:

    I hate this Lomwe government to shit

  11. problems are with us.Ithink govt should continue work extra harder by cutting expenditure,like mps salaries be cut by50%.lhave been working in gvt for 24yrsbut lget less than70,00Mk yet an Mp receives alot of money within5yrs,becomes millionaire.Tchito yake itiyo?lam looking to that day where justice and fairness shall prevail[cry ofaMalawi civo servant]

  12. Nalimata says:

    ur name has been changed from Good-all to Bad-all Gondwe

  13. Sops says:

    I usef to blame our brothers and sisters who leave the country for greener pastures,now i know the economy isnt in a very good shape,i guess we should expect rougher times ahead more taxes as the kwacha is falling against major convertable currencies,where is my passport i need a work permit kwacha ili makola yaye

  14. The Analyst says:

    O…………………………………………………………………………………………………………………………………………………………………………………………O
    The problem with Good-All Gondwe and his cohort is that they want to be seen to do the right thing not because they believe that doing right is the right thing to do; but because they want to impress the donors.
    . . . Need we wait for donors to tell and constantly remind us to check our expenditure?
    . . . Need we wait for the white man to tell us to live within our means?
    . . . Need we be told that the progress on cashgate is thus far not as impressive as expected?, as the kingpins of cashgate (Mphiyo and the one who summoned it) are just as free as any innocent soul on the streets of Malawi or London or wherever? and no political will (or whatever will) is there to bring them to book?
    . . . Need we some special wisdom to realise that the IFMIS under whose watch, money was stolen; is the same system being used now?, hence no sane donor can take their money into it?
    ……………………………………………………………………………………………………………………………………………………………………………………………..
    Are you surprised therefore that the EU has made this declaration? How come that some of us are not surprised?
    . . . We need to do the right thing because we believe doing the right thing is the right thing to do, not just because we want to meet some useless IMF targets.
    . . . Indiscriminately and proportionately punish those who stole our monies and make an effort to seize their ill-gotten property. And this should be done with reasonable speeed.
    . . . Government’s payment system needs to be changed or customised to some more robust system.

    Otherwise, if this economy of ours crumbles (which is just a matter of time), you cant fix it, as we all know you dont have the capability. You may therefore wish to fix it now while you can.
    O…………………………………………………………………………………………………………………………………………………………………………………………..O

  15. kamwendo says:

    Gondwe/ find the substitute, how will business survive when RBM monies loaned to your local banks,loan agents, make these banks big profits in billions.Let your banks too accept losses in this situations as we hear, other big international companies make losses; eg BPs ,lozziay,stanibic bank UK.Let banks through your understand that businesses is always about risking, not to customers only but to both bankers and their customers.How do you feel as government people loosing their hotels, houses etc, but the government understands the situation better .If you are a sailing ship”s captain/pilot,better give warnings as you have done or give LIFE JACKETS to those drawing .Banks in Malawi make too much profits every year,Why>

  16. Phwado says:

    It is better that way than having all the donor money ending in the pockets of APM,his bunch of Dpp and Lhomwe thugs.Ndalama zathu nkumavinira tchopa mutabelekera apusi okufa,manganje,m’mbwiza zoona mukuonera local porn ya atsikana mabere pamtunda!

  17. Thako Lambeta says:

    Why is it that we alwez hear news of the stupid donors cant u leave them alone and move on? So much that we can do to bail ourselves from this poor economy but we busy talking donors and mathanyula. WTF!

  18. Kanyimbi says:

    Its a long time we need to work extra hard. Those people who can not pay tax should do some work for the government. For example poor women should be fetching water, poor men moulding bricks at the end, a school can be built for them. Not only the working class should be punished with taxes. Is it a sin to be a working class? While we are busy working to pay taxes, the poor are busy on their mats making more children who will need more medicine, more teachers, more policemen etc, Again we have more skilled labour in our prisons these can be used to do meaningful developmental work for the government and not only farming which can be done by the unskilled prisoners moreover many prisons have tractors which can be used for farming.

  19. savimbi says:

    Koma mabvuto alipo chaka chino.Wina alisiya dziko atsakufuna.I can see now the President volunterily RISIGNING PEACEFULLY saying DZANDIKANIKA A MALAWI ANZANGA wina ayeseponso.The Prophecy is being fulfilled this year .Mark my words.

  20. Muuzana says:

    Instead of chasing the unskilled for taxes the governments should chase its own skilled civil kings& civil queens who are siphoning billions of tax payers money on the obscene allowances like fuel (1000 litres, housing, phone, use of very expensive & luxury vehicles. The cuts on these things will save billions. Charity begins at home

  21. fraba says:

    Fuck the government how can a country that has got less than 20million people being suffering of hunger while the government is busy spending money for stupid things when we say that Malawi is a poor country I don’t believe it fuck u all who are there in the government you are so greedy

  22. innocent shepherd Msiska says:

    This large amount money pliz do not put Cash ndagwira mwenda Mr presiden & servant.

  23. Ganesh The Wise says:

    Just to put that in perspective – a skill the online ‘journalists’ obviously lack – the EU will GIVE the Malawian people nearly 500,000,000,000 (500 billion) Kwacha.

    Not a loan like their Chinese’friends”

    A grant. A gift.

    And even so, the government fails to thank the EU or to capitalise on this generosity.

    Which, as a taxpayer in the EU, really pi**es me off!!!

  24. Sukulu ndi yofunika says:

    Does Nyasa times have any Editors??? This article is very confusing, the first sentence does not make any sense. What are you trying to say????

  25. tsetsefly says:

    Investigate the 570 billion plunder,table and pass the ATI. Money flow in from donors.There is no magic.

  26. Kakha Erutu says:

    I am very saddened by the conduct of our media. The way they report about issues concerning our economy is very disheartening. Disheartening because instead of communicating hope, they always preach message of hopelessness.

    Everybody knows why donors stopped providing budgetary support to Malawi. Thievery called cash gate. But the media and some corrupt and misguided minds blame one individual for the decision of donors. I find this kind of thinking very strange. Strange because it demonstres how the media in Malawi hate their country.

    I wish I were a media practitioner. I would be telling people how donors contribute to the poverty of most developing countries and how not to depend on them. I would be telling people to stop thinking about donors and stop talking about them. People would knowbthatbthe moment we stopped talikng about them, they would realize how irrelevant they would become.

    Ladies and gentlemen, to ge honest with ourselves and the donors, Malawians do not need anybody to support our recurrent budget. We have done a year without them. Here we are moving on though with some pain but we have something we can point at and be proud of – a country without external assistance. I would be telling people that all the sufferings you see are but a passing o wind. One day we shall be a proud and happy people.

    So, media please, start using your pen to give hope to the people. Stop pointing your fingers pointing.

    Amen

  27. Winston Msowoya says:

    I wholeheartedly support the decision of the EU Nations to reject giving development funds to the Malawi government because of its failure to use the funds sensibly.Blavo EU and do not compromise on this issue.Malawians do not comprehend that the funds are not coming from the pockets of the EU leaders,but from the pockets of the hardworking tax-payers.Regretably,the funds are used by individual senior officers for their own personal interests.For instance,the late corrupt tyrant Bingu Wa Muthalika stole billions of Kwacha that ended up in building a personal State House in one of the most poorest states in Africa.It did not end there,his successor who happens to be his brother,used the funds to rig the last general elections which endedup in minority status.In mid of last year,he hired a private jet to fly his tribal buffoons to New York costing tax- payers Mk300 million,as that was not enough,toward the end of last year,he hired a myriad of uneducated rogues as his political advisers accompanied with unprecedented astronomical salaries and perks contrary to their qualifications which are low and undesirable.The present economic and political quagmire is attributed to Muthalika’s poor judgement and his politics based on ethnic divisions which allow him to use dead souls in strategic positions hence,the downfall of his regime.Once again,I strongly appeal to EU Nations not to throw their money to thieves as the people of Malawi in general,won’t benefit from it.

  28. Xyz says:

    You can’t tax unskilled labor. Such individuals rely on every penny they earn. It’s actually inhumane to try and tax people that are already stretched. Your solution is not increasing the tax base. Your problem is management of the taxes you do get. You talk a good game about tightening the fiscal belt, but nothing truly effective happens. Until you cut down on the useless government allowances, motorcade sizes, and other such useless expenditure, do not even think of asking for another penny from tax payers. Clearly the Ministry of Finance is full of people who lack the capacity to be effective. Mxiiim

  29. savimbi says:

    Tinkanena ife,PALIBE CHISINTHE PA MALAWI,BCOZ MA DONORS SAPEREKABE NDALAMA kuthandizira Budget yathu by 40% ija amatipatsa nthawi zonse.They will only start giving us that 40% if DPP itachoka m’boma.These are bloody Crooks who cannot be trusted with Donor money.

  30. Chalaza says:

    Taxing a labourer. Pangani muone. The same labour will make you accountable to cashgate and thats the fall of democrancy in malawi

  31. Ejukweshoni (Mulizi, 1993) says:

    EU and all other development partners, by doing what you are doing, you are proving to all of us that you really love Malawi and that you are siding with us the ordinary Malawians. Please do not relent and do not give them any penny till they can prove to all of us that they will be prudent with donor money as well as our taxes.

    We extend the same message to tobacco buyers not to buy too much tobacco because the proceeds won’t be invested into social services, rather it will all go to Ndata farm, Mulakho extravanza, and all other DPP croonies.

    This is our time and together with your help ( donor community ) we can put a seal into this madness type of politics.

  32. Malawian says:

    Malawians need to tread carefully because it would seem there are just too many cooks trying to produce an appetising dish. IMF/World Bank, Kachaje, these numerous university experts etc are indeed bringing up a mixed bag in order to rectify the evils other unscrupulous politicians created in the name of righting the ailing economy and dipping unnecessary hands in the government coffers. If these donors don’t want to assist why should they keep on repeating the same story? I am sure what they are waiting to hear from the government side is that all monetary departments will be headed by their people to help them reduce unemployment in their backyard where the unemployment is rampant. They are just worsening our situation and on the other hand you will see some unpatriotic Malawians pouring petrol on an already burning house, seriously?
    I just laughed it off when I read that basically these developed countries were ripping us off by not honouring business ethics. All this was perpetrated in front of those we call our own bred technocrats who unfortunately were in a slumber, busy engaging themselves in petty and pitiful issues on the political front whereby every Jim and Jack is all smiles when they are capped “Political Advisors”. As I earlier said, we waste our precious time arguing on matters that will take us nowhere since 1964. Should we be groping in total day light and wonder why we are not developing after 52 or so years after independence? If you heard the EU representative right, he said the option the Malawi government has is to reduce civil servants, really? If that is followed the same people pouring fuel on an already burning fire will instigate a civil strive against government without sitting down to find the route cause of what the country is experiencing. Mind you brothers and sisters, the same business partners we trust so much plot downfalls of many governments and Malawi is one of them. They put up a 3 to 5 year plan strategising on how a country can be brought onto its hands and knees. If we cannot devise plans to uplift ourselves and rely very much on foreigners then surely the country will be auctioned and it will be the same friendly countries who will buy us off by colonising us all over again. What a situation we are in due to poor planning and just looking up to the tip of our noses. Too many cooks spoil the broth, they say.

  33. KUKHALA says:

    BUSHIRI IS BE THE BEST ALTERNATIVE FOR MALAWI. HE HAS ALREADY DONATED FOOD AND CAN AS WELL LEND FUNDS TO MALAWI GOVERNMENT . THE PROBLEM WITH MALAWI POLITICIANS IS LOOTING AND ABUSE OF FUNDS. POLITICIANS HAVE INFLUENCED THE UN WELCOME CONDUCT IN THE MALAWI GOVERNMENT SYSTEM- BAD GOVERNANCE PRACTICES.

  34. KUKHALA says:

    LOOTING TOO MUCH MALAWI POLITICIANS & CIVIL SERVANTS MONEY IS AVAILABLE WITH DONORS AND ALSO LENDERS BOTH LOCALLY AND ABROAD BUT CONCERN IS CASH GATE !!!!!!!!!!!!!!!!!!. BUSHIRI HAS ENOUGH TO LEND THE GOVERNMENT BUT CONCERN LOOTING PRACTICES. BUSHIRI HAS DONATED BY ALREADY BUY DELIVERY FOOD TO HUNGRY MALAWIANS IN THE HUNGER STRIKEN LOCATIONS AS NOTED IN THE MEDIA.

  35. Mulangeni says:

    Olympus is falling down

  36. Dr Kamoto, Chief Kwataist says:

    Nkhalamba iyiso, it’s high time he was shovelled out of cabinet. We have so many young intelligent malawians who can take over from him. People like myself, Ralph Kamoto, Gerald Viola, Wilkins Mijiga, Dr Kabwira ext etc

  37. Jasitasi says:

    Bravo EU. Do not fund them. They are thieves. Let that government grind to a halt! You give them money they misuse it on useless overseas trips with other people’s wives.

  38. MIGHTY MAN says:

    utill when should we hold our patience. …time has come for Malawians to boot out the failures n replace them with the byouthful readers who can change the status of Malawi by building its economic n developmental muscles..

  39. A_G says:

    Then what are they doing here? Nothing? It’s time they left our country!!

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