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(NYASATIMES) World Bank withhold $40m Malawi budget support

World Bank withhold $40m Malawi budget support
By Nyasa Times
Published: May 31, 2011

The World Bank is holding back $40 million in budget support to Malawi because the country hasn’t completed the review of its program with the International Monetary Fund. The Daily Times reported on Tuesday that lender is waiting for a review of reforms to help address persistent external economic imbalances, quoting the bank’s country manager.

“At the moment, we are not able to proceed to board presentation (of Malawi’s budget support operation),” said Sandra Bloemenkamp, the World Bank’s manager for Malawi, according to the paper.

The money is for the budget for the fiscal year through June.

“We hope that agreement between government and the IMF will be reached soon on the critical reforms to help address the persistent external imbalances that threaten to derail the country from its current growth trajectory,” Bloemenkamp added.

The report said World Bank assured that Malawi would still get the budget support immediately an agreement is struck between it and the IMF.

Malawi relies on Western donors to bankroll 40% of its development budget.

Britain, the biggest single donor to the impoverished nation, has also withheld its donor support following President Bingu wa Mutharika’s decision to expel British High Commissioner Fergus Cochrane-Dyet after the publication of a leaked cable in which he criticised the Malawian president for becoming “ever more autocratic and intolerant of criticism”.

Western donors in March threatened to cut their budget support to Malawi, criticising the country for new media restrictions and uncertainty around local elections that were originally planned for April 20

Malawi, where half the 13 million citizens live on less than a dollar a day, will for the first time run on a zero-deficit financial plan.—(Reporting by Judith Moyo, Nyasa Times)

Labels: DONORS, IMF, MALAWI, World Bank

posted by MrK @ 4:45 AM