A high-powered Malawi government delegation led by Finance Minister Felix Mlusu held a bilateral dialogue meeting with the European Union (EU) at Capital Hill in Lilongwe on Wednesday to request the EU to “consider the resumption of direct budgetary support” but the plea was rebuffed.
Mlusu was flanked at the meeting with Minister of Foreign Affairs Eisenhower Mkaka and Justice minister Titus Mvalo as well as some senior officials from the three ministries.
But the EU at the closed-door meeting stated that while there is assurance from the new Tonse Alliance administration on reforms relating to public finance management, there is still more to be done by the Malawi government if they are to resume direct budget support.
The EU, one of Malawi’s long-time development allies, has also told Capital Hill that budgetary support “is just one tool of supporting Malawi” as the 27- member political and economic union indicated that “there are other tools.”
EU charge d’affaires for Malawi Aurelie Valtat said they had good discussions with Malawi Government authorities on possible resumption of budget support suspended in the 2012/13 financial year following revelations of plunder of public resources called Cashgate.
She said Mlusu gave a good presentation which was “very factual and one of the key issues they highlighted is the limited public funds available to implement their policy.”
But Valtat order for Malawi to regain its eligibility, the EU needs to see reforms in areas relating to the management of public funds without prejudice to the contribution of European taxpayers.
Malawi is yet to reclaim the trust of donors, seven years after the revelations of the massive plunder of public money at Capitol Hill – christened as Cashgate – exposed in September 2013.
Before suspension of direct budget support, traditional donors, including the EU, were bankrolling about 30 percent of the country’s recurrent budget and at least 85 percent of the development budget.
Due to the loss of confidence, the development partners opted to channel their support for projects through international non-governmental organisations.