Malawi’s Minister of Finance, Dr. Maxwell Mkwezalamba and the Director for East and Southern Africa and Africa Caribbean and Pacific (ACP) Coordination at the European Commission, Francesca Mosca, on Thursday 5 December, 2013, in Brussels, Belgium signed the Financing Agreement for a project that will provide further support to Malawi in the amount of EUR 8.7 million (about K2.74 billion), specifically with the aim of strengthening Public Finance Management (PFM) systems.
The European Union (EU) contribution adds to the current support to short term measures put in place to address the revelations of looting of public resources, notably the provision of technical assistance to the Accountant General’s Office and support to the Office of Director of Public Prosecutions.
Meanwhile, the EU has welcomed the actions undertaken so far to strengthen public finance management systems in Malawi. The EU assured it will remain vigilant on the current internal situation and will continue to monitor and support the current drive for reforms.
The Public Finance and Economic Management (PFEM) Reform Programme aims to speed up Public Finance Management reform process. It is a 4-year programme, which was prepared with assistance of Development Partners and formally adopted by the Malawi Government in February 2012.
It is also part of the Action Plan recently adopted by the Government aimed at addressing weaknesses surrounding public expenditure management systems in Malawi.
The reform programme, to which this Financing Agreement is contributing, will absorb USD40 million overall. It has identified necessary improvements in thirteen (13) key PFM areas, including financial control, financial reporting and oversight of government finances, enhancing procurement capacity, improving records management, and strengthening audit systems in Malawi.
Besides enhancing the efficiency and effectiveness of the public sector and key governance institutions, the programme will improve basic service delivery and, ultimately, access of Malawians to essential health and education services.
Development Partners in Malawi are contributing to the implementation of the reform programme through a Multi Donor Trust Fund under the management of the World Bank. The Trust Fund is coordinating financial and technical support to implement this ambitious programme.
The Minister of Finance, on behalf of the Malawi Government, has thanked the European Union for this timely support that will go a long way in strengthening fiduciary systems in Malawi.
Further, he has highlighted Malawi’s commitment to ensuring that the resources made available under the Financing Agreement are put to their intended use.