Goodall upbeat on budgetary support resumption in Malawi, World Bank gives glimmer of hope —Report

Finance, Economic Planning and Development Minister Goodall Gondwe  has said he was positive that multilateral institutions such as the World Bank, the European Union (EU) and the African Development Bank (AfDB) would provide budgetary support of between US$110 million (K80 billion) and US$120 million (K88 billion) by March 2017 to support the current K1.2 trillion fiscal plan.

Gondwe comments are contained in a local newspaper interview, saying government is hopeful  that  it will satisfy all the conditionalities given by the donors  to enable Lilongwe receive budgetary support.

“We are expecting this year the World Bank and the European Union to provide us with budget support,” Gondwe said as quoted by The Nation, a daily newspaper.

He told the paper that the World Bank and EU have given Malawi government “ a lot of conditionalities”.

Said Gondwe: “ We are in the process of satisfying them. We are expecting $80 million from the World Bank and about $30 million from the EU.”

The country’s purse keeper admitted that last year, government did not meet the conditionalities as outlined by the multilateral donors.

The conditions remain visible progress in public finance management reforms, including incorporation of main government bank accounts in the Integrated Finance Management Information System (Ifmis), procurement of the Ifmis software itself, enforcement of the Public Finance Management Act and coordination of cash management, among other areas.

“We didn’t do well on conditionalities last year,” he said.

But Gondwe said  according to the donors, this year Malawi government has done well.

“ So, likely between December and March we should be able to get a combined [package]; it could be $110 to $120 million,” he said.

The newspaper also quoted  World Bank country manager Laura Kullenberg , saying the Bretton Wood institution remains committed in principle to the use of budget support as a modality of development financing and the bank is hopeful this would be disbursed in this financial year.

She said: “We are still early in the process, but we are hopeful that budget support can be disbursed in this financial year.

“Once agreement on the policy and institutional reforms has been reached and they have been implemented, and with the approval of our senior management, then the World Bank can disburse budget support.”

Kullenberg said the bank recognised that government has made progress in rebuilding its systems of public financial management and control since Cashgate.

“However, there is still much more that needs to be done in this process. We are committing to working alongside government in these efforts,” Kullenberg said.

The Nation also quoted the EU saying it would assess Malawi’s eligibility for budget support at the end of 2016 or early 2017.

“To this effect, a team of independent consultants will be recruited to verify progress against the eligibility criteria, including progress in public finance management.

“At this stage we do not want to pre-empt the outcome of this assessment,” James Dolan, head of political, press and information section at the EU Delegation in Malawi, said as quoted by the daily.

He added that the EU would continue to implement the current country programmes for Malawi for a total of 560 million euros and that in 2016 the union will be launching new programmes worth around 220 million euros.

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