Aid/donor taps expected to open for new Malawi under Joyce Banda

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Malawian Vice-President Joyce Banda addresses a media conference in the capital Lilongwe April 7, 2012. Banda took over the running of the southern African nation on Saturday after the death of President Bingu wa Mutharika, and fears of a succession struggle receded as state institutions backed the constitutional handover. REUTERS/Mabvuto Banda

By Jon Herskovitz
Malawi’s finance minister expects suspended international aid to be restored under its new president, Joyce Banda, helping prop up a budget increasingly under strain after the previous president picked fights with overseas donors.

Finance Minister Ken Lipenga also told Reuters on Monday that former President Bingu wa Mutharika, who died on Thursday of a heart attack, had blocked plans called for by the International Monetary Fund to devalue the currency because he was worried the move would hurt the poor.
Aid-dependent Malawi slid into economic crisis over the past year as Mutharika, a professorial but temperamental former World Bank economist, squabbled with major western donors who then froze millions of dollars of assistance that had traditionally bankrolled about 40 percent of the budget.
“I expect the resumption of aid will happen,” Lipenga said.
Foreign diplomats showed their support for Banda by visiting her residence even before she had been officially installed, but so far there have been no concrete signs the West is preparing to restart the flow of aid.
The finance minister has not yet discussed economic policy with Banda since she became president but he thinks she will be able to address some issues that raised red flags with donors including suppression of human rights and the media.
“The donors were emphasising the concerns of the Malawi people,” he said.
Mutharika plunged the country into isolation last year when he expelled the ambassador from former colonial master and biggest aid donor Britain, who said in a leaked diplomatic cable Mutharika was autocratic and intolerant of criticism.

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