UK want Malawi’s further reforms before resumption of budget support

The UK government has indicated that Malawi government is yet to meet all the necessary conditions needed in order for the UK to resume its general budget support (GBS) to  the the southern African country.

The UK says ‘progress against a range of partnership needs to be assessed’ first. It has pointed out that some of the areas that need assessment include human rights, public finance and domestic accountability.

The UK was responding to one of recommendation contained in UK parliament’s International Development Committee report on “development situation in Malawi”, which was published last July.

The Parliamentary Committee pointed out that GBS to Malawi should be resumed on the grounds that Malawi has seen a continued progress since President Joyce Banda came to power in April following the death of her predecessor, Bingu wa Mutharika under whose leadership the GBS from Britain was frozen due to poor governance and poor human rights record.

British Prime Minister David Cameron and Malawi President Joyce Banda.

The reported stated:“Subject to continued progress of economic reforms in Malawi, we urge DFID [Department for International Development] to reinstate general budget support … It is important to avoid continuing uncertainty, especially given that the other donors may follow DFID’s lead.”

In response the UK said it “appreciates that the government of Malawi’s bold and rapid economic reforms have strengthened case for a resumption of general budget support to Malawi. “

However, London pointed out that “progress against a range of partnership commitment needs to be assessed … The new administration has made in some [areas] including repeal of some of the repressive laws passed by the previous government and we are in discussion with government [Malawi] officials on how to take forward further reform.”

Further delays in resumption of General Budget Support could be severe for Malawi government and poor rural and urban Malawians, in particular.

The issue is not only what the parliamentary committee has identified that other donors could ‘follow DFID’s lead’ but also because this will leave a huge deficit on Malawi’s national budget.

The British government is the largest budget contributor to Malawi. At the time of aid freeze, about 18 months ago Britain contributed up to £19 million annually.

Meanwhile, Malawi has struggled to cope with the effects of austerity measures taken by Joyce Banda government largely on instructions and recommendations by the donor community as a way of resuscitating the country’s economy, which was on the verge of collapsing when Banda when Joyce Banda inherited it.

Further delays in the budgetary support by Britain will also increase voices of frustration and anger  among many Malawians towards the donor community, as they feel betrayed by the donor community, as they fail to honour their pledge to fully support Malawi in the aftermath of drastic social and economic reforms that the Malawi government has taken.

The suspension of general budget support by Britain  was a response  to the performance of the  Malawian Government: the then President, Bingu wa Mutharika, had become increasingly autocratic, whilst also presiding over an economic crisis.

Mutharika’s decision to peg the Malawian kwacha to the US dollar had led the currency  to become dramatically overvalued, with  consequent shortages of fuel and foreign exchange.

 

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