Don’t expect rescue package – EU tells Malawi

The EU’s ambassador to Malawi on Friday called on Malawi to put its house in order, warning it should not expect “a rescue package” to fix its battered economy.

“It is unlikely that donors would give Malawi a rescue package to address its problems,” European Union ambassador Alexander Baum said at a conference.

“Malawi still needs to put its house in order. Why should donors help Malawi address problems it created by itself?” Baum said.

“Malawi has to rebuild confidence. It’s not just a matter of changing government.

“To the international community, Malawi remains the same country regardless of whether there is a new government. The image remains the same,” he added.

Donors had suspended funds — which make up 40 percent of the government budget — due to concerns about hardline governance and rights issues under late president Bingu wa Mutharika.

New President Joyce Banda moved swiftly to restore relations after taking office following Mutharika’s death in April.

She also implemented reforms like devaluing the national currency the kwacha against the dollar.

Major donors Britain, the World Bank, the International Monetary Fund, and the US have since restored aid.

Though government and donors had agreed on a reform plan, concerns remain as to whether the political and civil service will allow a swift implementation of the reforms, said Baum.

The EU slashed aid to Malawi from 154 million euros ($200 million) in 2010 to 55.2 million euros the following year.