European Union (EU) Ambassador Rune Skinnebach has urged the Malawi Government to commit to public finance management reforms to secure the direct budget support the country has signed.
He said this at his residence in Lilongwe yesterday when Minister of Finance and Economic Affairs Simplex Chithyola Banda signed the agreement on behalf of the Malawi Government, allowing the EU to provide 55 million euros (about K107.9 billion), of which 50 million euros is direct budgetary support.
The financial package will be directed toward enhancing the efficiency, effectiveness and quality of secondary education in the country.
Skinnebach said the EU has decided to invest in the education sector to complement Malawi Government’s human capital development initiatives under the Malawi 2063 (MW2063) Vision–the country’s main growth and development blueprint.
The first tranche will be disbursed at the end of the year, while the remainder will come within 30 months if Malawi meets all targets and indicators under the project.
The envoy stressed that the government will have to ensure prudent public finance management and be accountable on how it is using its resources to improve people’s welfare.
Said Skinnebach: “We have to understand that this tranche comes with a commitment to accountability.
“The government has already made some progress with the Ifmis [Integrated Financial Management Information System] and setting up the Revenue Administration Tribunal. The judges have taken an oath, so there is progress.”
He described the EUs investment in secondary education as an investment in the future of Malawi.
“It is about expanding opportunities for the next generation, equipping young people with the skills they need and creating an environment where every student has a fair chance to succeed.
“The focus on secondary education, therefore, is not just about supporting a sector—it is about unlocking potential and promoting inclusive growth,” said Skinnebach.
In his remarks, Chithyola thanked the EU saying the support will help create fiscal space.
On the bank’s call to commit to public finance management reforms, the minister said the government has already implemented some reforms to secure this agreement and committed to address the gaps that undermined previous development projects.
“We are already working to build capacity in the ministry to ensure that people can use these systems effectively. We have used the support that we got from other development partners to plug the existing gaps that delayed our PFM reforms,” said Chithyola-Banda.
In an interview, Ministry of Finance and Economics Affairs spokesperson Williams Banda said all ministries, departments and agencies (MDAs) were integrated in the Ifmis, but did not elaborate on the extent to which the MDAs are using the system.
Government, through the ministry and Reserve Bank of Malawi, committed in the memorandum of fiscal and economic policies to use the Ifmis to check against financial mismanagement.
Malawi met the commitment but there were concerns from the fund in the last country report that the system was not used consistently, a development attributed to a lack of capacity in MDAs.
The EU has since urged Malawi to accelerate the agreed reforms under the IMF Extended Credit Facility programme signed in November last year, including the use of the Ifmis to ensure further disbursements, restore macroeconomic stability and achieve collective goals.
To expedite the reforms, Economics Association of Malawi acting president Bertha Bangara-Chikadza called for collaborations between the Ministry of Finance and Economic Affairs to ensure that the entire system is reformed and “that MDAs are coordinated, not working in isolation”.
“Mindset changes for people to understand the importance of these reforms and what the country can look forward to if they are achieved,” she said in a WhatsApp response.
In a separate interview, National Working Group on Trade Policy chairperson Fredrick Changaya urged local authorities to improve performance management systems in the public service.
“Controlling officers should sign off targets, including systems upgrade, internal controls and specific outcomes of the MDA in question,” he said. “There must be clear rewards and punishment for performance levels against each major KPI [key performance indicator]”
