Malawi’s Finance Minister Dr Ken Lipenga has said government understands feelings of Malawians who have expressed concerns about the delay by some major donors to release financial support towards the 2012/13 national budget.
The minister said in an exclusive interview at the weekend that the concerns come when the Joyce Banda administration has implemented bold economic and governance reforms addressing most of the concerns Malawi’s development partners and human rights groups earlier raised.
Malawi receives a harmonised budget support from its key donors under the Common Approach to Budget Support (Cabs) group comprising the United Kingdom, Norway, Germany, the Africa Development Bank (AfDB), the European Union (EU) and the World Bank, who traditionally bankroll just over 30 percent of the national budget.
But as the first quarter of the 2012/13 financial year draws to an end this month, only two donors—the World Bank and the AfDB—have released some budget support amounting to $50 million (K14.5 billion) and $40 million (K11.6 billion), respectively.
“Malawians acknowledge that government has gone a long way to address most concerns raised by our development partners. They then hear that budget support may be delayed because of concerns about the Auditor General. When the Auditor General resigns, Malawians hear that budget support may be delayed because there is no Auditor General. Some Malawians are puzzled by this,†said Lipenga.
He said there is need to strike a balance to ensure that ‘budget support should not be delayed until every single issue is addressed.’
Lipenga said he believes that it is important to work together to address concerns and resolve the remaining outstanding issues in a spirit of partnership.
Said the minister: “The price of commodities is increasing due to the continued depreciation of the Malawi kwacha. We hear of some stock outs of drugs and even ready to use therapeutic food which is needed for malnourished children. This is why an early resumption of Budget Support is so critical. We need to import fertiliser, fuel and medicines now.â€
He said government is committed to implementing reforms – including in the National Audit Office—but said it is important to recognise that reforms take time as government must follow correct procedures in changing senior management staff in any organisation.
He said following such procedures is necessary for the purposes of accountability and transparency.
The minister said he looks forward to the first Cabs review meeting where stakeholders, including Malawi’s donors will review indicators related to macro-economic management, public financial management, human rights, and the targets for individual sectors, including agriculture, health and education.
“I sincerely hope that our development partners will disburse the Budget Support in line with their commitments so that government can improve the quality of health and education services and promote food security and sustainable economic growth. Malawians should not suffer because it takes some time to complete reforms,†added the minister.
Following growing pressure from the International Monetary Fund (IMF) and the donors under Cabs, the new Joyce Banda administration swiftly implemented economic and governance measures that donors said would help address the country’s chronic balance of payments challenges, including a severe shortage of foreign currency during the late president Bingu wa Mutharika’s regime.
Specific measures that the new administration has implemented include devaluing the local currency, the kwacha, by 49 percent and the adoption of a floating exchange rate regime, among others.
Britain, which is Malawi’s bilateral donor has since indicated that the nature of future of British support for Malawi-including budget support-depended on the current political and economic progress.
As we went to press, Cabs chairperson Asbjorn Eidhammer, who is also Norwegian ambassador, had not responded to a questionnaire sent to him last week.
