Donors divided over aid freeze


A cloud of uncertainty still hovers over resumption of suspended budget support by Malawi’s development partners under the common approach to budget support-CABS.

CABS Co chair Alexander Baum said at the second-CABS-review meeting in Lilongwe that the decision to resume support will be in the hands of individual donors.

“The possibility of disbursement is still on the table, but every development partner has to make their own judgment,” said Baum.

While others among the development partners are of the view to restore the $ 150 million budget support hanging at their coffers, some have stood their ground not to.

Instead, the donors say they prefer funding the country through development projects saying they are not yet convinced to trust Malawi’s once cracked financial system.

German Ambassador to the country Mr Peter Woste for instance said Berlin is yet to determine Malawi’s fate on the matter.

On the other side Britain’s Department for International Development-DFID- said is not ready to resume the support in short to medium term.

DFID head of delegation to the country Sara Sanyahumbe said Malawi’s performance financial management has not yet been satisfactory.

“We made it clear when we had suspended financial aid in November that this would be a thing that we will keep under constant review. There are some big issues that needs to be looked into and there are still risks involved in putting our money into the government system.

“But if you ask me that are we going to resume financial aid soon, my answer would be no. It is going to take us some time,” said Sanyahumbe.

In November last year, the donors put on hold their budget support following revelations of looting and plunder of public resource in the infamous cash gate.

The current stand would mean continued crippling of the economy, and budget imbalances.

But finance minister dr Maxwell Mkwezalamba is optimistic the economy will get to its feet. All eyes are on what would government do next to cover up for the existing financing gaps.

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