Donor money start to pour in: EU gives Malawi K18b grant

Just after Malawi has passed the International Monetary Fund (IMF) test, the  European Union (EU)  has given Malawi  K18 billion grant on Monday, November 25 2019 to support its Public Finance Management reforms dubbed ‘Chuma cha Dziko’ Programme.

The signing ceremony between Malawi and European Union of an K 8 billion grant

Finance Minister Mwanamvekha (L) and EU Ambassador Sandra Paesen show the signed documents

In the wake of revelations of the plunder of public resources at Capital Hill, known as Cashgate, exposed in October 2013, donors suspended direct budget support to Malawi.

Instead, the donors channelled their assistance through some international non-governmental organisations.

Now there is a flicker of hope that donors will be giving Malawi budget support owning to the confidence shown by IMF.

Speaking during the signing ceremony of the grant between Malawi and European Union took place in Lilongwe, Minister of Finance Economic planning and Development Joseph Mwanamvekha among many things thanked EU and assured its Ambassador to Malawi, Sandra Paesen that the money would be put to proper use.

Mwanamvekha said the five-year programme will cost EURO 22.0 million (more than K17.7 billion) out of which EURO 8.7 million (K7.08 billion) is for technical assistance.

“The programme will achieve efficient and effective use of public resources to contribute to the growth of Malawi’s economy and development.

“It is set to improve tax administration through interventions in revenue policy and tax administration to increase fiscal space for financing inclusive growth and development,” Mwanamvekha said.

Mwanamvekha also said  it will help save more money in government that has been lost due to poor public finance management such as in procurement, contract management  and payroll, among other things.

EU Ambassador and Head of delegation to Malawi, Sandra Paesen said the programme will focus on public procurement and contract management, payroll and pension management, commitment control and debt management, parastatal financial management and oversight.

“Government institutions will be involved in its implementation, including the Treasury, the Accountant General’s Department, Public Procurement and Asset Disposal Authority, Office of the President and Cabinet and Department of Human Resources Management and Development,” she said.

She pointed out that under technical assistance, government will engage experts in the implementation of the Programme over the next five years.

“The programme will address key constraints to growth, namely corruption and under collection of tax revenues which will ensure accountability and transparency in the use of public resources,” she added.

The EU Ambassador further said the programme will create space for participation of the public, including Civil Society Organisations and media. This is also in line with the Malawi Growth and Development Strategy III (MGDS III) direction, particularly on good governance.

The development comes after  IMF Executive Board of Directors, sitting in Washington D.C,  Friday approved resources amounting to $40 million (about K29 billion) to support Malawi’s reconstruction efforts in the aftermath of the devastating cyclone Idai.

The Board also met to complete the second and third reviews of the three-year Extended Credit Facility (ECF) programme with Malawi, an arrangement which is worth $112.3 million (about K83.1 billion).

Mwanamvekha said the decision by IMF is a clear signal by the fund “of their faith in Malawi government’s economic management”.

He said the approval by IMF has come at a time when “government and the people of Malawi are focused on a growth path to take advantage of the macroeconomic stability that continue to prevail in this country.”

The Finance Minister said following the IMF approval, Capital Hill and Malawians expect “without doubt” that such a decision will have a strong signaling effect to other donors to resume budget support to Malawi.

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Munthu
Munthu
4 years ago

A child starts by crawling, then stands up, crawls, walks and finally runs. As a nation, Malawi is like a child that never learns to walk and run. We are always so happy to receive handouts, over which the big fish salivate to see who is going to grub the lion’s share! If corruption were to be reduced even by half, we wouldn’t be beggars for foreign aid. How can leaders of the “warm heart” of Africa enjoy their ill-gotten wealth while the masses are struggling? I pray for justice and expect all who have stolen from the public purse… Read more »

Mangochi Kabwafu
Mangochi Kabwafu
4 years ago

Pathetic nation.

CRY MY BELOVED COUNTRY

There we go again–EU wasting their money again to this terrorist regime of DPP. This money is going to be used to buy pangas, machetes, and guns to arm the DPP Interhangwe cadets. These people can be compared to the Interhangwe that slaughtered a million Tutsis in Rwanda. DPP Cadets are a tribal and regional terrorists armed and sponsored by Tippex President. Peter Hitler Mutharika stole the elections through rigging and intimidation of other political parties agents. Malawians will not accept him as our president. We gonna burn every shit until this man steps down. We are sick and tired… Read more »

kanchenga
kanchenga
4 years ago

Seriously. Malawians are really barefooted in the head. Requiring external help you manage administrative and processing issues. Instead of asking for wealth creation help such a caning factory in Mulanje. A meat and milk processor in Mzimba. A paper factory in Chikangawa. Sometimes I wonder that if as professor and having travelled well Peter can be this stupid what would become of him if he had not gone to school. In anycase he is a reflection of the people who voted for him. Dump and mumus from South. I am comforted by the fact that the Nyau Dr Banda out… Read more »

Moya
Moya
4 years ago

When we are approaching to the conclusion of the court case its when these moneys from IMF and EU is being given to DPP government. In real financial risk assessment world they would have waited to see the outcome then proceed thereafter. I smell a rat here. Africans we need to see beyond, why are they pouring more money at this hour? To be used against someone? To create confusion in this country? Are they financially arming some one here?

Ulemu Banda
Ulemu Banda
4 years ago

Ever so deeper descending into unmanageable debt. We can never fail the IMF test because the IMF is happy borrowing us money knowing that they will continue to control all our export and import resources and other programs they are interested in, whilst knowing we will struggle to pay back the huge debts we have amassed over the years. Malawi will never develop because when our leaders see the money they see glory.

Mtondoli Jonazi
Mtondoli Jonazi
4 years ago

This a welcome development, but to be honest, I do not think it is something we must be proud of. We cannot continue being at the mercy of donors for eternity. We should be looking at weening ourselves off and become self-reliant. 55 years after independence we are still worse off than most countries that got independent after us. What excuse do we have for not developing?

Patrick Phiri
Patrick Phiri
4 years ago

Basi, APM yemweyo. Mufuniranji zinazi.

Post
Post
4 years ago
Reply to  Patrick Phiri

Inde inde

boris
boris
4 years ago
Reply to  Post

Seriousiy?

nabetha
nabetha
4 years ago
Reply to  boris

WE want real leaders osati zilipozi

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