World Bank has not withhold Masaf funding
The World Bank has not withheld funding for Malawi Social Action Fund (Masaf) or any other projects in the country, country manager Laura Kullenberg has said.
In a statement, Kullenberg said the two closed projects: Masaf III and Agriculture Development Programme—Support Project (ADP-SP) have outstanding advances, which the projects have not yet accounted for.
“As is normal procedure in such cases, the bank has asked government as recipient of the funds to document the outstanding advances or refund the unaccounted for funds.
“In cases where project advances are unaccounted for, government would not be able to access fresh advances as a disbursement option for new projects until the outstanding advances are documented or reimbursed,” she said.
In such rare cases, said Kullenberg, government must use its own funds for new operations, for which it is later reimbursed by the bank.
“This does not mean the bank has withheld or frozen funding for ongoing operations. Neither does it mean the bank has stopped preparing new projects.
“In fact, there is a bank mission in Malawi at present preparing a $75 million [K36 billion, at the current exchange rate] additional finance operation for Masaf IV to be delivered this fiscal year,” she said.
Kullenberg also said the $32.8 million (K16 billion) for Masaf IV approved by Parliament last year is not at stake because the limits on advances applies only to new projects and is not applied retrospectively.
On this, she said the Masaf IV loan was approved by the bank board in December 2013 and will not be affected.
“What could potentially be affected is the disbursement modality for the planned additional financing [AF] for Masaf IV whose preparation is underway.
“If outstanding advances have not been reconciled by the time the AF project is effective, the government would not be able to access new advances from the bank for this project,” said Kullenberg.
In worst case scenario, the bank does not expect that to be the case as government has already agreed to refund $70 169.61 (K33.3 million) for Masaf III, which involves three district councils and not Dowa only as was earlier thought.
Kullenberg said the proposed repayment in instalments is not for Masaf, but ADP-SP.
