Wednesday, January 20, 2010
By Nyasa Times
Published: January 20, 2010
The International Monetary Fund (IMF) has asked a grouping of international donors to unlock budgetary support to Malawi which they have been withholding awaiting a new IMF programme, the Fund said on Wednesday.
Malawi’s Finance Minister Ken Kandodo (pictured) said support from the Common Approach to Budget Support group (Cabs), a donor grouping of Britain, European Commission, Norway, Germany, the World Bank and the African Development Bank, would help ease a foreign exchange shortage in the country.
“Donors were withholding $545 million in budgetary support in the absence of a programme with the Fund … but we are now relieved that the Fund has written the Cabs group in the country to release funds,” Kandodo told Reuters.
IMF resident representative in Malawi, Maitland Macfarlan, said: “I can confirm that we have asked the Cabs group to release budget support to Malawi ahead of next month’s IMF board meeting.”
Malawi is heavily reliant on donors with budgetary support accounting for over 40 percent of the national budget.
The IMF board last month shifted the decision for a new programme for Malawi to February 10, worsening fears that the Cabs group would not release the funds on time.
Economists have said that the delay in the disbursement of donor funds, low tobacco earnings last year and big bills for imported fertilisers and fuel have contributed to the scarcity of foreign exchange in the last eight months.
Malawi’s programme with the IMF, the Exogenous Shocks Facility (ESF), was completed last year.–Reuters