EU, WORLD BANK DISMISS ATUPELE

The European Union (EU) and the World Bank yesterday distanced development partners from remarks by United Democratic Front (UDF) presidential candidate Atupele Muluzi purporting that donors will only resume budget support if there will be regime change in the May 20 Tripartite Elections.

Atupele, the youngest of the 12 presidential candidates, told a rally in Mzuzu on Sunday that alongside his running mate Godfrey Chapola they met representatives of the International Monetary Fund (IMF), the World Bank and other development partners last Friday.

He claimed the development partners told opposition leaders they would only support the budget if there is change of government.

Said Atupele: “On Friday, Dr Godfrey Chapola and I met with World Bank, International Monetary Fund [IMF] and Malawi’s donor partners who told us openly that if we don’t change government this year, then we will revert to zero-deficit budget.

“Today, the Government of Malawi has already started to put in place zero-deficit budget and you all know what this means, the problems we encountered will come back to haunt us if we continue with this government. They [donors] have told us openly that because of Cashgate, issues of theft and economic mismanagement, they will not inject any money if things don’t change.”

But in a written response to a questionnaire from The Nation to verify Atupele’s claims, EU head of delegation Alexander Baum said whereas he did not personally listen to Atupele’s address, disbursement of budget support is based on macro-economic stability as assessed by the IMF and the public finance management-related assessments of fiduciary risks.

Said Baum: “[The Malawi] government has implemented a number of actions, but many actions necessary to fix the public finances are still work in progress. Each partner assesses its fiduciary risks and takes decisions on this basis.

“There are no political criteria linked to budget support in Malawi other than what we call the ‘fundamental principles’, i.e. human rights, democracy etc. There is consequently not a link to a specific government and I have doubts that any colleague from the international partners would have said something different. I hope this clarifies it.”

In an earlier interview, Zeria Banda, who is responsible for communications at the World Bank African Regional Office, said when the World Bank met with UDF members, nothing was said regarding elections.

She said: “We met with leaders of various political parties, including PP [People’s  Party], MCP [Malawi Congress Party] and UDF to share our perspectives on the state of the economy and how to sustain reforms for more meaningful economic development. We also discussed agricultural reforms. We did not touch elections or results thereof.”

Malawi’s national budget is financed 40 percent by donors on the recurrent expenditures and 80 percent on development expenditure. Last November, the country’s major donors under the Common Approach to Budget Support (Cabs), to which Baum is co-chairperson, announced the withholding of $150 million in budget support in protest over plunder of public resources at Capital Hill widely known as Cashgate.

Last week, an IMF mission from Washington led by Tsidi Tsikata said the IMF will wait for the elections before it releases a $20 million (about K8.4 billion) disbursement into the government purse as part of the Extended Credit Facility programme.

Tsikata also said the mission had proposed to return to Lilongwe in June to confirm the recommendations agreed before submitting a report to the IMF management and Executive Board.