Malawi’s major donors on Tuesday said there has been “substantial improvements” in political, economic and democratic governance since President Joyce Banda took over in April, but expressed concern about reports of abuse of public resources.

Common Approach to Budget Support (Cabs) co-chairperson Asbjirn Eidhammer, who is also Norwegian Ambassador, said the improvements have resulted in a new trust between development partners and the Malawi Government.

But Eidhammer said the donors are still concerned about revelations of abuse of public resources at the National Audit Office (NAO) which they say is affecting the perception of accountability in use of public resources.

“It is now important to continue on this path and resolve issues as they appear with a view of improving conditions for an economic growth that benefits all and to strengthen democratic and economic governance on which provision of budget is based,” he said.

Eidhammer was speaking at a first 2012/13 financial year Cabs review meeting in Lilongwe aimed at reviewing the performance of the budget and its impact on poverty reduction efforts as well as to assess the performance of the 2011/12 fiscal year.

He reiterated donors’ commitment to help and work with Malawi in improving the living conditions and reducing poverty.

The ambassador recalled that during the review meeting in May this year, Cabs donors committed themselves to reconsidering budget support and indicated a plan for disbursements based on different procedures.

He said so far, the group is progressing very well as they are aligned to their disbursement adding that the African Development Bank (AfDB) and the World Bank have already disbursed about $90 million in budget support.

Eidhammer also said Cabs has seen commendable progress in many areas such as commitment to sound macroeconomic management, good governance and respect for human rights, democratic principles and rule of law.

He also said Cabs donors are pleased to learn that media freedom has improved with the repealing of Section 46 of the Penal Code, which empowered the Minister of Information to ban even local publications deemed not to be in public interest.

Eidhammer, however, said although President Joyce Banda is committed to a new drive against corruption, it was imperative for the ruling administration to create a strong independent Anti-Corruption Bureau (ACB) and restore the full functionality and credibility of NAO.

Reacting to the donors’ observations, Finance Minister Dr. Ken Lipenga said Malawi has reached a “critical juncture” during the reform process, which, he said, requires the country to stay on track with reforms if there is to be any hope for the future.

He told the donors that government remains committed to all principles underlying budget support.

Lipenga thanked the World Bank and AfDB for the timely disbursement of the $50 million and the $40 million budget support grants, respectively, saying such a gesture has helped to improve Malawi’s balance of payment (BoP) position.

The minister also said to strengthen financial management at NAO, new internal control measures have been put in place to ensure checks and balances taking into account recommendations from Independent Auditors.

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