Malawi has intensified its search for grants, budget support and other concessional financing with Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha lobbying development partners for additional resources.
In an interview on the sidelines of the Eighth Korea-Africa Economic Cooperation (Koafec) Ministerial Conference underway in Seoul, the minister said the African Development Bank (AfDB) has assured Malawi that it could increase its initial budget support while the host, South Korea, has opened the door for more grants, concessional loans, technical assistance and investment.
“It was a fruitful discussion with the AfDB president and we are expecting to get more than we requested earlier. We got assurance from the bank that we will receive more support,” Mwanamvekha said after meeting AfDB president Sidi Ould Tah.
He said his ministry was working on the paperwork to access the additional resources, which would help ease Malawi’s foreign exchange pressures as government pursues longer-term measures to stabilise the economy.
The AfDB has already approved $20.5 million (about K34 billion) in direct budget support for Malawi, but Mwanamvekha said the country now expects the amount to rise to about $30 million (about K51 billion).
The minister said he also sought AfDB support for the National Statistical Office to conduct a national census, which government considers important for planning and resource allocation.
Yesterday, Mwanamvekha also met South Korea’s Deputy Minister of Finance and Economy Jinsung Moon who said Korea was open to supporting Malawi and other African partners.
He said the engagements were also useful in gathering technical insights for government’s planned rebasing of the gross domestic product (GDP), which is currently based largely on data collected in 2017.
“Both the bank and the deputy minister shared valuable insights on our plan to rebase the GDP to reflect the current reality. We need up-to-date information for effective decision-making,” said Mwanamvekha.
In a separate interview, AfDB executive director for Malawi, Botswana, Mauritius and Zambia Nalishebo Shebo said Malawi could benefit from additional financing opportunities, particularly as it works towards securing a new programme with the International Monetary Fund (IMF).
He said: “Malawi is trying to get on IMF programme. The minister highlighted that in the last few months there has been quite positive progress on this.
“Despite this, the bank understands the pressure that Malawi is facing and this is why it is making available these funding opportunities.”
On his part, Moon said South Korea could provide expertise in digital technology and artificial intelligence, while Malawi could explore Korean grants and loans and opportunities to attract Korean investment.
Meanwhile, Economics Association of Malawi (Ecama) president Bertha Bangara Chikadza, who is also attending the conference, said grants and other non-debt financing, though limited, could help government reduce its reliance on borrowing.
“Instead of government going on the market to borrow some money, with AfDB giving us this money, it means we are moving away from borrowing. Secondly, this money is coming in dollars, which slightly reduces government’s pressure on forex,” she said.
But Chikadza, who teaches economics at the University of Malawi, cautioned that securing grants should be viewed as a short-term measure while government addresses the underlying economic problems driving the country’s financing and foreign exchange pressures.
Koafec was established in 2006 as a platform for Korea and African countries to deepen economic cooperation and share development experiences. The partnership covers areas including infrastructure, agriculture, energy, trade, human capital development and digital transformation.
