The Malawi Government’s capacity to absorb foreign aid and grants is appallingly low, according to chairperson of board of trustees of Millennium Challenge Account-Malawi (MCA-M) Simon Itaye.
He has since pleaded that this should not happen with the $350.7 million (about K177 billion) five-year compact from Millennium Challenge Corporation (MCC), an independent US Government foreign aid agency.
The compact’s power sector revitalisation project aims at increasing the capacity and stability of the national electricity grid and bolster efficiency and sustainability of hydropower generation.
Itaye, speaking at the private sector business breakfast in Blantyre on Wednesday, said since there is no extension on the MCC compact, there is need to use all the money for the intended project.
“If we don’t use the money, it goes back to the US. We know that capacity of absorbing aid and grants in Malawi is low. We hope that doesn’t happen with the MCA Malawi,” he said.
Itaye is hopeful that come September 2018 when the project would come to an end, the country would have absorbed all the money.
MCA-Malawi chief executive officer Susan Banda, who said the project is on track to meet the deadline, said they engaged the private sector because it is critical to the job they are doing.
Lafarge Malawi business development manager Nestor Msowoya said as a company, they need about 25 MW, which is about seven percent of Electricity Supply Corporation of Malawi (Escom) installed generation capacity at 351 MW.
“[Because of this], the issue of reforming the power sector is critical. Our programme is heavily reliant on the reform in the power sector,” he said.
Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Newton Kambala said unreliable power has always been a constraint to economic growth.