World Bank’s CAS aid based on performance

World Bank has said its US$695 million Country Assistance Strategy (CAS) aid package for Malawi will be released based on various key factors such as the country’s performance over the next four years.

World Bank Country Manager for Malawi Sandra Bloemenkamp told the media in an exclusive interview last week that the package, announced on January 29 this year, is an ‘indicative envelope’ which Malawi will draw from based on continued bank assessment.

She also said the decision on whether a particular disbursement will be a loan or grant would be made at specific project level.

“Based on the country’s credit worthiness , Malawi is eligible for 50 percent loans and 50 percent grants,” said Bloemenkamp, adding: “Then the decision of how this is divided at project level is a result of consultations between government and the bank.”

She says for example, the Malawi government made a specific request that all budget support should be grants.

Bloemenkamp, who besides being the bank’s Country Manager for Malawi is also Team Leader for the CAS, said the process of developing the CAS is very consultative with government and therefore there are no conditions attached but just agreements.

“From the discussions, there is mutual agreement on the programmes to be implemented hence “conditions” may not be the right term,” she said.

She said the bank supports the government with knowledge and policy advice to help inform its decision making.

Bloemenkamp said for example in March 2012, the World Bank presented a plan for competitiveness, growth and poverty reduction which was anchored on four pillars: regaining macro-balance; social Impact and mitigation, growth rebound; and a medium term agenda for productivity and diversification.

She also said apart from CAS, the World Bank has also made available to Malawi US$150 million for a Rapid Response Programme which is based on the reform effort undertaken by the government to revive the economy and restore stability.

She said the programme has a social protection angle to cushion the most vulnerable.

Asked how the bank will guard against abuse of the resources by politicians or any government officials, she said first and foremost, government shares the responsibility to ensure that the resources are not abused.

“Then the Bank has fiduciary management systems to quell abuse of resources,” she said.