World Bank conditions confuse legislators
Confusion reigned in the House yesterday when Minister of Finance, Economic Planning and Development Goodall Gondwe tabled a Bill seeking authorisation to borrow $80 million from the International Development Association (IDA) of the World Bank.
Initially, the members of Parliament (MPs) had been informed this would be budgetary support in the form of a grant.
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However, what confused some MPs further was the wording of the Bill, IDA (Agricultural Support and Fiscal Management Development Policy Financing) Loan Authorisation Bill and contents which did not indicate that the funds would go towards repaying domestic debt which had accumulated to K155 billion in 2014.
Gondwe started by defending the loan which he described as a concessionary credit, saying the World Bank has previously offered such loans in the past.
In outlining what it has taken for the government to qualify for the funds, Gondwe said there were institutional and policy reforms that government ‘must’ undertake.
Included in the conditionalities are reduction of distortions in the agriculture sector, basic public financial accountability, Farm Input Subsidy Programme (Fisp) reforms as well as reforms to improve the operations of State produce trader Agricultural Development and Marketing Corporation (Admarc) to enable it issue public reports and financial statements.
He said the repayment period would be 50 years with a one and a half percent commitment charge which the government would not pay because it was a single tranche disbursement.
His use of the present tense brought about the confusion among some MPs who wondered why government wanted the House to agree to it to embark on carrying out conditionalities of the World Bank.
People’s Party (PP) spokesperson on finance Ralph Jooma said this did not need support from the House.
“Let’s call this what it really is, a concessionary loan. How is it budgetary support when the World Bank has prescribed how this money should be used, going by the name of the Bill?” he wondered.
Rumphi East MP Kamlepo Kalua (PP) also wondered why government needed to borrow billions of kwacha just to fix a broken public system “due to bad leadership”.
He suggested that the Bill be referred to several committees for further scrutiny.
However, Gondwe said the conditionalities had already been met.
A government that does not empower the youth has no moral justification to borrow money from international organisations, especially when a great percentage of that money will have to be repaid by the currently neglected youth! Mr Goodal, please support our education and empower the youth or else stop borrowing!