Britain is to buy up to £20 million worth of Malawian currency to help stabilise the African state’s economy following a major devaluation, it has been revealed.
The announcement was made by International Development Secretary Andrew Mitchell during a visit to Malawi which marks a relaunch of the bilateral development partnership under new President Joyce Banda.
The Bank of England will also provide a financial expert to help the Malawian Government deal with the impact of the one-third cut in the value of the kwacha, carried out on the advice of the International Monetary Fund earlier this month in a bid to shore up the ailing economy.
Britain suspended direct aid donations to the government of Malawi last year, because of concerns about the economic management and governance of the administration of former president Bingu wa Mutharika, who died in April.
Foreign Secretary William Hague last month announced the UK would appoint a new High Commissioner to the Commonwealth state, a year after the expulsion of the previous holder of the post, who had branded Mutharika “autocratic and intolerant of criticism”.
And on May 12, Mr Mitchell announced £10 million in urgent funding from the UK’s existing aid budget for Malawi’s health system, directed through non-governmental organisations.
Mr Mitchell was talking with President Banda, who took office on April 7, and senior Malawian finance officials in commercial capital Blantyre.
He will tell her that Britain is determined to ensure that ordinary Malawians do not suffer short-term consequences from the devaluation, which is regarded by the international community as a step in the right direction for Malawi’s long-term financial security.
During his three-day visit, the International Development Secretary will also meet with representatives from civil society, the private sector, the religious community and the donor community and view a number of UK-funded programmes, including health clinics.
Mr Mitchell said: “Britain has been a long-time friend to Malawi and we stand ready to help Malawi during this difficult time of transition.”