Malawi govt urged to remove hurdles preventing donors to release aid

A local economist Friday Jumbe is pushing government authorities to urgently remove the hurdles and obstacles strewn in the country’s path towards economic recovery which is making donors withhold their budgetary support to Malawi.

Several international donors including Britain are withholding their aid to the southern African donor dependent nation which they promised to assist once the country bows down to IMF pressure to devalue its currency the Kwacha.

Despite devaluing the Kwacha by almost 50 percent, the donors are indicating that they will not release their funds until 2015 saying they are still observing the President Joyce Banda’s financial prudence among other issues.

Jumbe: Remove the hurdles

For example Britain is currently withholding funding to the Anti-corruption Bureau citing the failure of government to appoint the bureau’s director for a position which fell vacant after the dismissal of its former boss Alex Nampota.

Some donors are also withholding aid to National Audit Office saying they will provide finding until all the mess associated with the office is cleansed.

“To me this is a simple exercise because it’s just a prerogative of the a head of state to appoint the director of the bureau. If the person it chose was rejected there many well qualified people which the president can choose from,” Jumbe says.

Jumbe says the withholding of money has put the country in an awkward position as all the government programs have been affected although the current administration is pretending to live as everything is normal.

“The government must be really practical about the cash budget. You don’t just disburse what you have collected because some programs will suffer.  You need to start prioritising the funding and put emphasis on pro-poor initiatives. And some which are more of less routine can suspended so that you are able to live within the budget”.

Jumbe also the former finance minster, says if that doesn’t happen “and you want to live as if life is as usual and in the sense that you are saying because you budgeted for MK400 billion we shall spend the MK400 billion regardless, then it means that you shall resort to borrowing which is very dangerous to the country.”

He says as a result interest rates will continue to sour and credit to the private sector will be unavailable and that will affect growth of the economy.

“The only way now will be for the minister of finance to tighten the belt further but this takes a political will and a bitter pill to swallow than to go on expenditure spree because if you do that then the inflation will continue and the very same donors will come back saying ‘your monitory policy is out of line”, says Jumbe.

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