Malawi is set to lose $15.8 million (about K11.7 billion) after the United States (US) government ordered its State agencies to freeze foreign aid financing effective September 30 this year.
According to the New York Times, the US administration in a letter ordered the State Department and the United States Agency for International Development (Usaid) to withhold all the funds allocated to this year’s projects until all the previously allocated funds are properly accounted for.
Reads part of the letter posted on www.nytimes.com: “All previously apportioned unobligated resources in the Tafs [Treasury Appropriation Fund Symbols] shall be unavailable for obligation until three business days after the Office of Management and Budget receives an accounting from your agencies of the current outstanding unobligated resources in the Tafs.
“This apportionment does not apply to unobligated resources available for obligation for salaries and expenses and upward adjustments for outstanding financial obligations in the relevant Tafs.”
Tafs are separate Treasury accounts for funds that have been provided by Congress for committing obligations or making payments to specific accounts, typically for certain programmess, projects, and activities, according to the State Department’s website.
US President Donald Trump has recently sought to re-orient Washington’s funding priorities. The State Department in July cut funding to Central American countries, El Salvador, Honduras and Guatemala, fulfilling a promise Trump made earlier in March.
If the aid freeze extends to Malawi, government could miss out on K11.7 billion, or approximately four times the funds allocated to the Ministry of Gender, Children, Disability, and Social Welfare, according to figures posted on www.foreignassistance.org.
According to the figures, government could miss out on $11.6 million (about K8.6 billion) and $4.1 million (K3.1 billion) from the funds allocated to development projects funded through Usaid and the State Department, respectively.
These are the funds that the US government was supposed to disburse from the commitments it made to Malawi in 2018. The figures constitute (funds promised to Malawi) less the disbursed (funds already spent).
The US embassy in Malawi were yet to respond to our questionnaire as we went to press yesterday.
Usaid is one of Malawi’s prominent donors in the health sector. The agency in January approved a $12 million fund (about K8.9 billion) towards to combat cervical cancer in Malawi and Zambia. Usaid is also collaborating with government in the Secondary Education Expansion for Development (Seed), a programme designed to accommodate female students who graduate from primary school but are unable to continue with secondary education due to lack of space