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Malawi finance minister admits donor-aid cut great punch in the stomach

LILONGWE (MaraviPost) – Malawi Finance Minister Goodall Gondwe has said the decision by donors to cut off aid to the country is a great punch in the stomach for the country.

Gondwe made the revelation during the presentation of the 2014/2015 K743 billion worth budget at the New Parliament Building in Malawi’s capital Lilongwe.

“Due to severe reduction in receipts from donors, the total resources that were available to the budget were severely reduced,” said Gondwe.

Malawi lost donors, who previously contributed over 40 per cent to budget support, following the revelations of massive looting of billions of kwacha by civil servants at Capital Hill.

“Mr. Speaker, Sir, you may recall that in the wake of the ‘cashgate’ scam, donors decided to withhold budget support which constituted about 16 percent of the 2013/14 recurrent budget and 11 percent of the total budget.

“What is not known publicly is the withholding of dedicated grants which were estimated at MK93.6 billion but only MK31.1 billion was received. The approved total grants of MK240.4 billion consisted of budgetary support, dubbed program grants in our documents, dedicated and project grants which were budgeted to cover 38 percent of the budget. In the event, however, only MK79.2 billion, which is 32.9 percent of total grants pledged, was infact received,” said Gondwe.

The finance chief said he hoped that with “fiscal discipline” Malawi was still going to make it.

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