Aid freeze to hit hard poor Malawians—CFSC

The Lilongwe-based Centre for Social Concern (CfSC) has warned that the current withholding of budget support by Malawi’s major development partners will likely inflict disastrous consequences on poor Malawians.

The centre has also condemned recent revelation of massive plunder of taxpayers’ money, popularly referred to as cashgate, saying the looting of public resources is a source of great social concern.

“The current freeze of donor aid that is primarily occasioned by the infamous cashgate and the potential risk that the current fiscal policy slippages poses in derailing the programme that Malawi has with IMF under the Extended Credit Facility (ECF) will have disastrous consequences on poor Malawians,” said Alex Nkosi who is CfSC social conditions research programme officer yesterday.

Malawi’s key donors sitting under the Common Approach to Budgetary Support (Cabs) are currently withholding $150 million), about K60 billion, which means that part of Malawi’s 2013/14 budget has not been financed, hence creating a fiscal gap.

On one hand, the IMF is also withholding a resource envelop amounting to $20 million (over K8 billion) towards a three-year ECF which was approved in June 2012.

The success of ECF programme often signals green light to other donors under Cabs and unlocks their budget support in the process.

Nkosi added: “The perpetual subjecting of poor Malawians to suffering because of serious blunders committed by a few people charged with leadership responsibilities is a source of great social concern.”

He said cashgate has explained why Malawi has been stuck in a poverty trap when the rest of the world is moving their citizenry from poor living conditions to an improved quality of life.

According to Nkosi, memories are still fresh when, during fromer president the late Bingu wa Mutharika administration, the entire nation was held captive by yet corrupt decisions that did not consider the welfare of the majority of Malawians.

“The most worrying thing is that the current donor aid freeze is coming at a time when the nation is in the midst of hunger. Data collected by the CfSC Rural Basic Needs Basket project from Kasiya (Lilongwe), Mayani (Dedza), Chingale (Zomba) and TA Maseya (Chikhwawa) shows that rural households are food insecure and are employing detrimental coping mechanisms for survival,” he said.

He said the worsening food situation has painfully revealed the inefficiencies of Malawi’s food system.

He said CfSC agrees with Malawi’s cooperating partners that the national budget be reviewed and adjusted in tandem with the prevailing economic environment.

But he urged that the changes to be brought about by the budget review should not affect funding to the social sector.

According to a revised budget framework presented last week to the Public Accounts Committee (PAC) of Parliament, total expenditure has been revised from K635.8 billion to K640.3 billion.

However, in order to remain within the ECF programme targets, substantial expenditure cuts of K15 billion and K17 billion have been made on generic goods and services and domestically financed development projects, respectively.

The new IMF resident representative for Malawi Geoffrey Oestreicher said the fund expects the resumption of donor budget support to begin before end June 2014 if the implementation of the Government Action Plan continues at the current pace.