The World Bank has given hope for Malawi to finally access budgetary support amounting to $80 million before the end of the 2016/17 financial year.
The news comes after visiting World Bank vice-president for Africa Makhtar Diop expressed confidence in the success of the country’s public finance management reforms.
In the 2015/16 financial year, government did not meet the conditionalities for obtaining budgetary support from World Bank and European Union, but Minister of Finance, Economic Planning and Development Goodall Gondwe was hopeful a decision would be made between December 2016 and March 2017 to tap into a total of $120 million (about K8.8 billion) from the two multilateral partners.
Diop was on a two-day visit to Malawi where among other things he held an audience with Ministry of Finance, Economic Planning and Development and President Peter Mutharika as well as signing a $174 million (K130 billion) additional financing agreement under Malawi Social Action Fund (Masaf) IV to scale up the Public Works Programme with one million more households.
Responding to a question from The Nation on the bank’s confidence levels that the Malawi Government has fulfilled conditionalities which include policy and institutional reforms, Diop said he believes that important progress has been made on public finance management, especially on auditing of accounts and reconciliations.
He said: “We are confident that by the time we will be taking the programme to the board the necessary actions that have been agreed upon, in terms of ensuring reconciliation of accounts and audits, will have been completed.”
Diop said in-depth discussions with officials from the government would provide evidence in the areas of reconciliation and auditing as well as measures for sustainability to ensure Cashgate does not occur again in future.
“I have had in-depth conversations with officials from the ministry to discuss important issues such as auditing certain government accounts and they are now providing evidence that this has been done. They are doing reconciliations to ensure that if there are discrepancies on the accounting side; that they are able to examine and sustain progress so that in future this [Cashgate] does not happen again,” he said.
The porosity of the Integrated Financial Management Information System (Ifmis), which largely contributed to Cashgate in 2013, is also a focus of the public finance management reforms which the World Bank is examining.
Diop said much as the current Ifmis was working and had produced results, the government should ensure new technology developments in the system reflect in the new Ifmis.
“I think the government will do much better in the future to take on all new developments in terms of technology of Ifmis systems [that have been developed] in the past years to include these and reflect them in the new Ifmis. We are working with the government towards that,” he said.
Diop added that when the board meets to discuss the possibility of budgetary support to the country, the World Bank would consider the fact that Malawi is facing external shocks which are weather related.
In September last year, Gondwe told The Nation that we are expecting $80 million from World Bank and about $30 million from the EU as well as African Development Bank which provided $26 million (about K15 billion) sector budget support targeting provision of health and education services in 2015/16.
EU is also expected to assess Malawi’s eligibility for budget support early this year but its eligibility criteria also includes progress on public finance management. n