Malawi donors remain elusive on aid, K30bn released out of K125bn needed -report

Out of seven key donors who provide budgetary support to Malawi, only two have so far released their aid totalling K22.9 billion (US$90 million) from the required K124.08 billion needed for the 2012/2013 financial year.

Business Times reported on Wednesday that the two donors that so far have unfrozen their aid to Malawi are the World Bank (US$50 million) and the African Development Bank (US$40 million).

This has been confirmed by both the Finance Ministry as well as the Common Approach to Budgetary Support (Cabs).

Lipenga: Aid inflows slow

Finance minister Dr. Ken Lipenga told the paper that not all the donors have released funds to support the budget which was passed by the national assembly some three months ago.

Said Lipenga: “The World Bank  has already provided US$50 million budget support as promised.”

The Finance Minister said he has also signed  on behalf of government an agreement for another US$100 million which will go to a number of pro-poor initiatives such as Masaf.

“The British have yet to provide budget support, but they were the first to come forward with sector support for the Health disbursed in June and July. The African Development Bank committed to support Malawi with US$45 million, and of this, US$40 million has already been disbursed. We expect the rest between December and January,” said Lipenga.

On the other remaining donors, Lipenga said he expects the aid to be disbursed later, including the EU which he said would release its aid in December after the Cabs review meeting.

On his Cabs Technical Assistant Chair Stephen Mwale said, “With the resumption of the IMF programme in Malawi, Cabs partners and the government are working closely in order to resume the budget support.”

The dilly dallying approach by donors has left many experts and ordinary Malawians wondering as to whether the key donors are really committed to assisting Malawi’s economic growth.

Meanwhile, one of the Cabs members Britain is on record as indicating that was not ready to resume with full budgetary support despite being impressed by President Mrs. Joyce Banda’s reform initiatives.

British International Development secretary Andrew Mitchell who visited Malawi in June is on record as saying British taxpayers are waiting to see if they would get good value for their money before the aid is released.

Malawi government depends largely on donor funds to bankroll its budget.

All this is happening at a time when key development partners such as International Monetary Fund, United States, Germany and Britain all pledged their unwavering support to president Banda’s leadership having fell out of favour with ex-ruler late Bingu wa Mutharika.

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