Britain withholds aid to Malawi: Mkwezalemba concedes donor confidence eroded

Britain – Malawi’s main bilateral donor – has withheld part of its aid  programme, for Malawi over the country’s concerns of economic mismanagement in the wake of cash-gate scandal at Capital Hill.

UK’s Department for International Development (DfID)  has “delayed the majority of its financial aid payments to Malawi” , the House of Lords in London heard on Wednesday.

The money is used for general budget support, which helps governments deliver their own national strategies for poverty reduction against an agreed set of targets.

During question time in the House of Lords on Wednesday, Baroness Kinnock of Holyhead asked the British government what assessment they have made of the Norwegian suspension of budget support to Malawi.

Mkwezalamba: Greater transparency critical to restore donor support

In response, Baroness Northover said: “There has been no separate assessment of the Norwegian suspension of budget support to Malawi but DFID officials in Lilongwe are in close contact with all donor partners, including the Norwegians, who provide budget support.

“They are closely monitoring the current fraud revelations and the Government of Malawi’s response, and are providing support to the on-going investigations.”

Baroness Northover added: “Meanwhile, DFID has delayed the majority of its financial aid payments to Malawi until it is clearer what action the Government is taking in response to the corruption scandal.

Experts said the aid decision will hit the country hard .

This is not the first time Britain has suspended aid to Malawi. It suspended general budget support in 2001, 2004 and in 2012.

Meanwhile, the newly appointed Minister of Finance Maxwell Mwezalamba has admitted that the massive looting of finances at Capital Hill has eroded donor confidence in Malawi.

“I am coming into this position (Finance Minister) when the country is facing a number of challenges, one of which is to restore donor confidence following the looting of public resources at Capital Hill,” said Mkwezalamba during the official opening of The Open Development for Evidence Based Policy workshop held in Lilongwe on Tuesday.

“I would like to assure you that I am very committed to get to the root of the problem and have it sorted out, because failure to do that will have catastrophic consequences for the country,” said.

He said restoring donor confidence will only happen if all the leakages that allowed the looting of public resources are sealed.

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