Government eyes IMF deal, touts progress on cashgate
Minister of Finance Maxwell Mkwezalamba said yesterday government’s current focus is to ensure that the economic programme with the International Monetary Fund (IMF), the Extended Credit Facility (ECF), remains on track.
Mkwezalamba, speaking to The Nation through an e-mail interview, said government has made “considerable progress” to date towards addressing the Capital Hill financial scandal to normalise its relations with development partners.
He said: “Considerable progress has to date been made in implementing the action plan [on Capital Hill cashgate]… Government is confident that current actions as expressed through its commitment to ensuring that the Malawi Economic Programme with the IMF remains on track and to fully and timely implement the Malawi Government Action Plan and other measures deemed necessary will soon restore donor confidence.”
The government action plan covers five broad areas, namely accounting, auditing, administrative measures, investigations and prosecution, and reform measures.
Mkwezalamba’s statement comes a few days after Malawi’s major donors under the Common Approach to Budget Support (Cabs), through their co-chairperson Sarah Sanyahumbi, warned that restoring donor confidence in Malawi’s public finance management system may take a long time.
The IMF is withholding resources worth $20 million (about K9 billion) towards the three-year ECF which is an important pre-condition for donor support.
Added Mkwezalamba: “In the case of Malawi, therefore, development partners are interested in the country having an economic programme that is being supported by the IMF.
“Secondly, most of the development partners would like to be assured that government systems of public finance management are working and are not open to abuse.”
According to Mkwezalamba, currently, government is tirelessly working on implementing its economic programme, which includes a revised 2013/14 budget framework.
He said the framework was recently approved by Cabinet in view of the delayed disbursement of budget support.
The minister also expressed optimism that following conclusion of the IMF Executive Board meeting in January 2014, favourable evaluation of Extra ordinary Performance Assessment Framework (Epaf) by the Cabs Group in March 2014 and on the basis of government’s strong commitment to the implementation of its action plan, it is expected that the delayed budget support will resume in the later part of the third quarter of 2013/14 fiscal year.
According to Mkwezalamba, 2013/14 being a special year, in view of cashgate, the Cabs group will base its evaluation of Malawi’s performance on the Epaf which he said to a large extent draws from the Malawi Government’s action plan.
Last week, IMF country representative Geoffrey Oestreicher said the institution expects the resumption of withheld donor budget support funds to begin before end June 2014 if the implementation of the Government Action Plan continues at the current pace.
According to Oestreicher, IMF has been following the design and implementation of the plan since its inception, and considers it to be a well thought out and comprehensive approach to the situation facing Malawi today.
