Government says aid suspension created imbalance

Director of Debt and Aid Management in the Ministry of Finance, Peter Simbani, says the decision by the donors to suspend aid due to Cashgate created a huge imbalance leading to massive cuts in resource allocation to various government departments.

Answering questions from participants during the Busan Global Development Cooperation Monitoring Survey Results and the outcome of the Mexico High Level meeting in Lilongwe on Friday, Simbani said despite making drastic cuts to allocations to various ministries it is difficult tom to operate without aid.

Forty percent of Malawi’s reccurent budget comes from donors.

Said Simbani: “Suspension of budgetary support had a very negative impact on the performance of most government projects because we could not meet most of our obligations. Even though we have resources through pulling together of domestic revenue, the suspension of aid hit us hard. This created a huge imbalance and during our meetings with IMF, we had to agree as to which areas we had to compeletely cut the budget. But in life   you cannot just cut everything to the bone and   as a country we still need assistance.”

Simbani said the country needs assistance now because it is difficult to operate with domestic revenue only.

Speaking during the opening of the meeting, Secretary to Treasury Newby Kumwembe disclosed that the draft Development Cooperation Strategy for Malawi covering the period 2014-2018 has taken long time to be finalised because it requires ample time for it to be meaningful.

“We had wanted to include on the agenda for discussion at this meeting the final draft Development Cooperation Strategy for Malawi covering the period 2014 to 2018 but there is a strong feeling from heads of Missions that this topic requires ample time to have meaningful discussions so that the document which will be the framework for our development can be meaningful,” said Kumwembe.

He said the Busan High Level forum which took place in South Korea from November 29 to December 1, 2011 agreed to establish new development architecture for developing countries.

According to Kumwembe the Busan Partnesrhip document highlights a set of common principles for all development sectors that are key to making development cooperation effective.

The principles include ownership    of development priorities by developing countries, a focus on results and partnerships for development and transparency and shared responsibility.