World Bank to support Malawi financial system

Malawi and the World Bank have signed an agreement which will see the bank contributing towards the setting up of a new financial reporting system for Malawi.

The two phased US$19 million Multi Donor Trust Fund (MDTF) funded project called Financial Reporting and Oversight Improvement Project (FROIP) intends to improve internal controls, accounting, reporting and oversight of the public finances at the central and decentralised levels in the ministries, departments and agencies.

Speaking after signing the agreement, expressed dissatisfaction over public finance management within the government system, saying there were inefficiencies and irregularities that occur in the systems draining already scarce resources.

He mentioned procurement of drugs and the Farm Inputs Subsidy Programme which, he said, have been riddled with irregularities and inefficiencies that needed to be arrested to protect public funds.

“Over the years the government of Malawi has grappled with issues to do with resources that are not properly accounted for. People take funds and use them for the wrong purposes with actions not being taken,” said the Minister.

World Bank Country Manager for Malawi Sandra Bloemenkamp said consultations were held with stakeholders to understand the gaps with a view to tailor components to address the existing deficiencies.

“It is expected that the citizens of Malawi will benefit from more effective service delivery facilitated by these reforms,” said Bloemenkamp.

The signing of the FROIP marked the first project under the multi donor trust fund administered by the World Bank to support government’s Public Finance and Economic Management Reform Program (PFEMRP).

The African Development Bank and the United States Agency for International Development (Usaid) are in the process of doing their internal paper work to support the project, according to the World Bank.

The project will support, among others, system development in the departments of the Auditor General, Accountant General and the Internal Audit Director.