Diplomats to fast track foreign aid for Malawi

European envoys have penned their governments to honour financial pledges made to Malawi to avert a potential economic and political instability, Nyasa Times understands.

Donors, who closed foreign aid taps including budget support during the Bingu wa Mutharika regime, promised to support reformed economic policies of President Mrs. Joyce Banda but reports indicate that only few donors have fulfilled their pledges.

The rising cost of goods and services has put a strain on Malawians and this could have a negative political impact on the leadership of President Banda. This  is the central theme of the dispatched briefs to donor countries.

“Most diplomats are impressed with the current economic and political climate and would not want the president to lose grassroots support because of the negative impact of economic reforms,” a diplomatic source told Nyasa Times.

President Banda: To get donor support


The source said the idea of pushing aid for government was mooted at a recent dinner hosted by a leading European ambassador concerned with a potential political backlash on President Joyce Banda following the impact of the devaluation of the kwacha and fuel price hikes.

However, he said the economic crisis in Europe has affected the good will of most donor countries as politicians try to balance the needs of their tax payers and the moral obligations of helping poverty stricken countries like Malawi.

“The money that comes from donors comes from their tax payers and with the global economic recessions that has already claimed the political life of some European presidents ,some governments are reluctant to splash money to African countries in form of financial aid,” said the source.

The source said Britain was under pressure to cut aid to India, a country that has more millionaires than Britain.


But government sources at the Treasury told Nyasa  Times Malawians should be patient as government has an economic strategy that will cushion the country from the devastating bang of the deflated kwacha and soaring cost of living.

Tony Blair, former British Prime Minister, who visited the country last month, told business captains and government to attract Foreign Direct Investment (FDI) and rely less on aid, change the current tax regime, reduce red tax and simplify trading rules in the region.

Research on economic growth and aid has shown that countries in Africa do not achieve economic success by depending on aid due to corruption and political instability.

Malawi started getting financial packages from Britain and other European countries soon after independence but to date still needs a substantial financial input   in from donors in its national budget.

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