World Bank mulls over budgetary support

World Bank has said it is pleased with progress that Malawi is making on monitored programmes it has with the International Monetary Fund (IMF) and the outcome may form the basis for direct budgetary support resumption.

Malawi, in 2013, lost up to 40 percent of budget support from foreign donors such as the European Union, the World Bank and the United Kingdom, because of the corruption scandal widely known as ‘Cashgate’.

But the visiting World Bank managing director of operations Anna Bjerde, taking questions from journalists in Blantyre on Thursday, said her institution cooperates with other partners in the budgetary support area and it was pleasing to see how Malawi was progressing on monitored programmes it has with the IMF.

“We look forward to working hand-in-hand and side by side with other development partners and see what to do to help Malawi [with direct budgetary support request],” she said.

Asked on the calls for help by the Malawi Government to meet its Balance of Payment (BOP), she said this is an area the bank cooperates with other partners who provide BOB support.

The BOP is the record of all international financial transactions made by the residents of a country. There are three main categories: the Current Account, the Capital Account and the Financial Account.

After Bjerde and her team visited Cyclone Freddy survivors in Chilobwe Township and Blantyre Water Board (BWB), she announced an $80 million grant the bank was disbursing to the Malawi Government to restore livelihoods of those affected, adding that an additional $100 million would also be made.

Later in the evening, the bank signed an initial $147 million grant with the Malawi Government for a water and sanitation project under BWB. Bjerde emphasised these were grants, being funds Malawi would not pay back.

Bjerde said the bank has been releasing funds to Malawi over the past year to support liquidity in many ways. She said the World Bank is working with other development partners, adding they were optimistic Malawi would be working within the agreed terms.

She said the grant signed is for water and sanitation aimed at increasing quality and quantity of water in Blantyre City and increasing services of sanitation and waste management.

Minister of Finance and Economic Affairs Sosten Gwengwe, who signed the grant on behalf of the Malawi Government, said the World Bank was a friend in need.

He said his ministry would take all measures to ensure that the funds are used for their intended purpose.

 Minister of Water and Sanitation Abida Mia said with the funding, BWB would be able to fix broken pipes damaged by cyclone Freddy, connect 300 000 clients to water supply and help 500 000 get improved sanitation services.

Bjerde was accompanied by the bank’s regional vice-president for Eastern and Southern Africa Victoria Kwakwa.

Yesterday, among other engagements, the World Bank delegation  toured the Lilongwe Water and Sanitation Project, which is increasing access to clean water through upgrades and utility efficiency reforms.

Currently, the World Bank is financing 21 projects in Malawi valued at $2.5 billion (about K2.5 trillion) in addition to five regional operations through which Malawi accesses $343 million (about K345 billion) in financing, thus a total commitment of $2.8 billion (about K2.8 trillion).