Maravi

(NYASATIMES) World Bank faults Malawi on aid absorption as EU withholds budgetary support

COMMENT - Earlier this year, British MEP and Brigadier in the British Army Intelligence Corps was campaigning to have EU aid to Malawi suspended for giving a loan to President Mugabe. And guess what, now aid to Malawi is suspended for 'poor absorption of aid'. I would say it should be clear to anyone, that 'donor aid' is used to directly influence if not dictate, the domestic and foreign policies of African countries. The November 18th 2009 article was: EU petitioned to suspend aid to Malawi over bankrolling Mugabe. I would say this is a clear abuse of the aid process, and shows clearly why African countries should not depend on donor aid, but on taxation from revenues of mines and other raw materials exports. I think a collective stance should be made through SADC.

World Bank faults Malawi on aid absorption as EU withholds budgetary support
Published: December 28, 2009

The administration of President Bingu wa Mutharika is being criticised by the World Bank for poor absorption of its aid.

The bank states, in its report of December 23, 2009, regarding its “Country Assistance Strategy for Malawi” that the country’s absorption of its aid has been “generally poor”.

“The bank allocated about US$340 million for the fourth country assistance strategy for Malawi, and Malawi’s absorption of these resources has generally been poor,” reads the World Bank report.

The report comes in the wake of the European Union’s decision to withhold budgetary support to Malawi.

The EU is withholding about K6 billion because of concerns with the “macro-economic framework” in Malawi.

However, the EU’s Acting Head of Delegation, Horst Pilger, disclosed that Malawi is close to reaching an agreement with the International Monetary Fund (IMF) which would enable the EU “to resume disbursement.”

Malawi’s Minister of Finance, Ken Kandodo, confirmed that donors are withholding their budgetary support as they await an IMF review report for Malawi in January 2010.

Malawi has been in bad terms with bilateral and multilateral donors for its obstinate stand insisting on fixing the exchange rate of the Malawi Kwacha, the local currency.

The Malawi’s government’s obstinacy on the issue has contributed to shortages of foreign currency and fuel which have combined to trigger what commentators say is “the worst Malawi economic crisis” since the country attained independence in 1964.

Labels: DONORS, EU, GEOFFREY VAN ORDEN, MUGABE, NEOCOLONIALISM

posted by MrK @ 3:20 PM