World Bank pledges rapid response to budget

The World Bank says it will work with the International Monetary Fund (IMF) in a rapid response operation to offer technical support and financing to Malawi as it prepares its 2012/13 national budget.

 

The next national budget is crucial to restoring macro economic stability in the country.

World Bank country manager for Malawi, Sandra Bloemenkamp, told The Nation exclusively that the bank plans a number of missions to Malawi to quickly respond to the country’s needs.

“As for the World Bank, we are planning a number of missions for the month of May to work hand-in-hand with the IMF mission on a rapid response operation, provide technical assistance to the critical 2012/13 [national] budget process and start preparing additional financing to Masaf and Irlad…,” she said.

The Malawi Social Action Fund (Masaf) and Irrigation, Rural Livelihoods and Development (Irlad) Project are two of the largest programmes that can deliver social protection assistance to both rural and urban poor in the country, she said.

Bloemenkamp said recent political changes in Malawi following the death of president Bingu wa Mutharika on April 5 2012 and the subsequent strong signals provided by new President Joyce Banda on the need for economic and governance reforms, have received strong and positive support from bilateral and multilateral development partners.

“The Spring Meetings provided an excellent opportunity for the Malawi delegation, led by Minister of Finance Dr Ken Lipenga, to present the new government’s latest plans for a comprehensive economic reform package to senior decision-makers from the World Bank, the IMF and most other key development partners of Malawi,” she said.

Malawi went through a peaceful transfer of power and swore in Banda after the sudden death of Mutharika, 78, from a cardiac arrest.

The World Bank said the peaceful transition has raised hopes for a fresh start for the country which has experienced a freeze on balance of payment support since January last year, creating a budget gap of $121 million in the current fiscal year. Over the weekend, the IMF asked the country’s donors and the World Bank to unlock funds and commit them to the upcoming financial year to help government plan it’s budget better.

Bloemenkamp said the World Bank is also ready to assist Malawi’s fertiliser subsidy programme to make it more effective and transparent.

She said the Bank attaches great importance to the design and implementation of effective social safety net programmes, assisting the poorest and most vulnerable people to escape the poverty trap.

The IMF suspended a three-year $79 million loan after the programme went off track when the government failed to devalue the kwacha and implement public finance management reforms.

The late Mutharika was blamed for an economic crisis that stemmed from a diplomatic dispute with Britain.

Banda’s first goal since taking office earlier this month has been to restore the confidence of donors.