Lilongwe, Thursday, May 21, 2015 (MaraviPost): As Minister of Finance, Economic Planning Goodall Gondwe is geared to present the 2015/2016 Nation Budget in Parliament on Friday, May 22, reports have indicate that the World Bank will withhold budgetary support to Malawi.
World Bank Communication Officer, Zeria Banda has been quoted in the local press on the development saying there was no prospects that Malawi could start receiving the budgetary support from Britton Woods institution soon as there were still unresolved fiscal issues the country was asked to work on.
For instance, the bank still need accountability from Malawi government on how part of MK70 million money which was meant for public works programmes in Dowa and Phalombe districts appears to have been misappropriated.
Zeria Banda said, last year, 2014, the World Bank channeled its financial resources into two projects-The Malawi Social Action Fund (Masaf 4) and the skills development projects worth US$ 83.8 million (about MK34 billion) and bank noted that there was an ineligible expenses meaning the funds were not used for the intended purposes.
“There was misappropriation of funds on these projects so when this ineligible expense was noted, we demanded a refund of the money as government failed to account for that. I can report now that Malawi government has made full refund of the money in March 2015. The refunded money is actually ploughed back to the international Development Association (IDA) pot for new allocation.
“If the money is refunded after the project closing, it does not go back to a country IDA pot but rather the general IDA pot. Since this money was recovered after Masaf 3 ended, it goes back to the general IDA pot for further allocations”, explained Banda.
She said the bank was unlikely that would support Malawi’s 2015/2016 national budget as there were still unresolved fiscal issues the country was suppose to work on.
“Our position on budgetary support still remains the same. When we’re ready to provide the support, we’ll let the nation know. Of course, we remain committed towards our development activities which runs up to 2017”, assures Banda.
In reaction this development, the social and economic monitoring body, Center For Social Concern (CFSC) has predicted tough time ahead if government wont spend its budgetary allocation within taxes base collection.
Speaking in an interview with The Maravi Post on Wednesday evening, Mathias Kafunda CFSC‘s Economic Governance and Justice Programme Officer said health and education sectors will be affected heavily due to budgetary allocation cuts.
“Due to the withholding of World Bank and other donors towards the national budget, it means there will be heavy cuts in budget allocations towards essential sectors such as health and education which most of the poor rely much. So, in this regard, we should expect more challenges to the common person in the villages to get such services which are already in tatters.
“Therefore, we are urging government to spend within the budget policy lines with the taxes base collection that the burden of donors aid support withdraw shouldn’t hurt much the poor”, urges Kafunda.
World Bank and other major donors have been withholding budget support for Malawi since resurfacing of massive looting of public funds at the capital Hill, government’s headquarters duped as Cash gate
However, International Monetary Fund (IMF) has recently flexed its muscles in resuming aid through the Extended Credit Facility (ECF).
