WASHINGTON-(MaraviPost)-The World Bank announces the release of a US$80 million (about K140 billion) grant to Malawi’s budget.
The funds aim at improving resource mobilization, budget execution, and transparency of public finances to assist the achievement of results under the Malawi Public Finance Management (PFM) Strategy 2023-2028.
In a statement made available to The Maravi Post dated Thursday, May 23, 2024, the bank says the International Development Association (IDA) grant complements the International Monetary Fund (IMF) Extended Credit Facility (ECF) arrangement and World Bank Development Policy Financing (DPO), both approved in late 2023.
The bank says, “As Program for Results (PforR), the funds will be unlocked upon the achievement of indicators such as an increase in domestic value-added tax (VAT) revenue collection, decreases in variance between approved budget and expenditure outturn, and an increase of contract data accessible by citizens”.
World Bank Country Director for Malawi, Zambia, Zimbabwe, and Tanzania Nathan Belete adds, “Low forex reserves and limited fiscal space have been major challenges for Malawi despite a new IMF program and the recent World Bank DPO series”.
Belete explains further, “The Fiscal Governance Programme for Results, therefore, presents a new and innovative financing instrument that will enable the government to unlock additional resources more predictably over the next five years”.
He added, “This will serve as a platform for harmonized planning, coordination, and utilization of resources for service delivery”.
In an interview with the Minister of Finance, Simplex Chithyola Banda attributed World Bank support to current leadership’s financial prudence on donors’ funds.
Chithyola however disclosed that “The total expenditure required by our PFM Strategy is approximately US$146 million”.
He says now, with this IDA financing of $80 million, authorities are slightly above 50 percent of the required resources.
“I am very optimistic that, with this, we will create a solid foundation for our fiscal governance and sustain policy reforms throughout the PFM Strategy implementation,” Chithyola Banda says.
World Bank support comes barely a month after Finance Chithyola attended an IDA meeting in Washington DC where he appealed for support towards Malawi’s programs on disaster and resilient approaches to locals.
