The World Bank says the Malawi economy is still fragile and has urged for continued implementation of good policies by the Joyce Banda administration if the country is to fully recover.
World Bank country manager Sandra Bloemenkamp made the observation at Sunbird Nkopola Lodge in the lakeshore district of Mangochi on Monday on the sidelines of a three-day National Risk Assessment Workshop organised by the Financial Intelligence Unit (FIU) in collaboration with the bank.
Said Bloemenkamp: â€œI think the situation is still fragile. It will be unfair to characterise it in any other way. It is also very difficult time for the country and it has been difficult times for a number of years for the country.â€
Her assessment confirms earlier assertions by local commentators about the countryâ€™s worsening economic environment which continues to be riddled with high interest rates and skyrocketing inflation, among others.
The economy is also sitting on a spate of industrial disputes triggered by the recent devaluations of the kwacha, resulting in eroded buying power and high cost of living, as well as floatation of the currency.
Said Bloemenkamp: â€œSo, fragility is still there and you would really hope that with the continuation of policy and with good explanation from the government, also with good support from internal and external [partners], programmes [on the ground] will work.â€
On the countryâ€™s Economic Recovery Plan (ERP), which was recently unveiled by Capital Hill in an attempt to address the challenges, Bloemenkamp said Malawi could recover quickly if government can demonstrate clear progress on its laid out programmes.
Asked to provide the bankâ€™s position on budget support towards the 2012/13 national budget, Bloemenkamp said it is important for all Malawians to understand and appreciate disbursement schedules planned by the various donors.
Currently, only the World Bank and the African Development Bank (AfDB) have provided their budget support to Malawi.
But Bloemenkamp expressed concern on the â€œlittle bit of misunderstandingâ€ about budget support and the overall assistance by Malawi donors.
â€œThese numbers get mixed up. The $165 million budget support was planned and we hope that with the continuation of good programme, all of that will be disbursed in the course of implementing the budget.
â€œIn addition to that, many external partners are providing support to the health sector, education, agriculture sector and infrastructure sector and sometimes through non-governmental organisations. All of that together is estimated to be close to $460 million, if I have my numbers right,â€ she said.
Meanwhile, Malawiâ€™s major donors under the Common Approach to Budget Support (Cabs) are scheduled to hold a review meeting in Lilongwe next month.
The donors and other key stakeholders are expected to review the performance of the economy, including indicators related to macro-economic management, public financial management, human rights and targets for individual sectors including agriculture, health and education.