Donors promise Malawi budget support: End of Zero Deficit Budget

It seems soon the closed aid taps to Malawi will start flowing again after donors embraced the Joyce Banda administration new economic agenda, and announced that the impoverished southern African country should expect resumption of budgetary support in three weeks.

The donors have pledged to do this even before the IMF concludes packaging a new programme with Malawi.

The donors expressed their commitment at the start of a bi-annual review meeting under the Common Approach to Budget Support (Cabs) in Lilongwe  with the new government and after Malawi showed commitment to meet her partners demand of good economic and political governance.

President Joyce Banda: Financial plan for 2012/2013 to get donor inflows

The donors stopped their budgetary support following the arrogant stand taken by the former regime of late Bingu wa Mutharika.

However, even after the promise the donors have told government to move swiftly to clean up the country’s bad laws such as the Injunction Law, Section 46 of the Penal Code that deals with media freedom and those laws bordering on minority rights.

The donors have also demanded that government investigate allegations that the Malawi Revenue Authority (MRA) borrowed from commercial banks to embellish their revenue collection prowess in the face of a zero-deficit budget.

Cabs co-chair and African Development Bank (AfDB) resident representative Andrew Mwaba commended the new Banda administration for actions already taken which he said demonstrates strong intentions and commitment.

“However, we would like to emphasise the need to review as soon as possible those laws relating to media freedom, minority rights and injunctions,” he said.

Malawi’s Minister of Finance Ken Lipenga also said the IMF is meanwhile fast tracking a new programme to replace the three-year Extended Credit Facility (ECF) which went off-track last year.

Mwaba said so far the IMF has written a letter of comfort to allow the donors “intervene immediately and so the AfDB and the World Bank have indicated that they will expedite the release of funds.”

He said it is expected that most of the donors will start honouring their commitments in the coming three weeks.

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