World Bank country director for Malawi, Tanzania, Burundi and Somalia Bella Bird was yesterday non-committal on whether the Bretton Woods institution will provide budgetary support for the 2019/20 National Budget.
Speaking at Sanjika Palace in Blantyre on the sidelines of a meeting the World Bank delegation had with President Peter Mutharika and other government officials, Bird said governments that receive budget support from the bank need to have a strong reform agenda.
She said providing budget support to the Malawi Government will depend on key policies and frameworks critical for promoting inclusive growth.
Said Bird: “Whether the reforms are on strengthening public finance management, strengthening procurement and putting in place key policies and frameworks, one needs to promote growth. That is when we look at the kind of budget support instrument that Malawi needs, and we are always open to discussion on that. So, let’s see what the future holds.”
On his part, Mutharika, while pointing out that his key focus in the next few years will be on growth, said Malawi could have achieved more in the past five years with budget support.
He said despite facing challenges in his journey to get Malawi out of poverty, his government has made many gains, adding that he is determined to develop and transform Malawi’s macroeconomic stability.
During the 2018/19 financial year, the World Bank withheld its K60 billion budgetary support due to failure by Cabinet to discuss proposed reforms for State produce trader, the Agricultural Development and Marketing Corporation (Admarc).
Without the K60 billion, grants were projected to decrease from K197.1 billion to K137.1 billion by the end of the financial year, representing a 30.4 percent decrease.
Due to the non-disbursement of the World Bank’s budget support, Treasury was forced to trim allocations to some ministries, departments and agencies (MDAs) in the national budget during the Mid-Year Budget Review in February.
Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said the delegation, which returns in two weeks, has agreed with government to have a roadmap for the budget support.
“One of the issues we have agreed is to have a roadmap. Once we have finished that, they have assured us that they will give us budget support,” he said.
Speaking earlier, Mwanamvekha said to a larger extent, the World Bank wants Treasury to pay a closer look at the financial governance which includes prudence in procurement management.
Economics Association of Malawi president Chikumbutso Kalilombe last week said Treasury needed to exercise prudence if the economy is to sustain the existing gains and register growth. Similarly, the Budget and Finance Committee of Parliament chairperson Sosten Gwengwe urged Treasury to consider strong austerity measures to ensure there is no fiscal slippage.