World Bank pumps in $50m for budget support
Malawi Government’s resolve to stay the course on reforms instituted last year has earned it a further $50 million grant (about K16.9 billion) from the World Bank for general budget support.
This is the first in a programmatic series of three Economic Recovery Development Policy Operations (ERDPO) approved on Tuesday this week to focus on strengthening macro-economic and finance management and lay a foundation for stronger growth and protection of the poor, according to a statement from the World Bank.
The bank says each of the ERDPOs will be a single tranche operation.
“Government has committed to stay the course of macro-economic and structural reforms undertaken since May 2012 to support the recovery process. The bank is, therefore, providing the much needed resources to help sustain these reforms and help ease the emerging fiscal pressures,” says Sandra Bloemenkamp, the bank’s country manager for Malawi.
The programme, says the statement, also seeks to consolidate reforms supported by the International Monetary Fund (IMF)’s $156.2 million (about K52.7 billion) three-year Extended Credit Facility (ECF).
The bank says the budget support is in recognition of reforms to support the implementation of the second Malawi Growth and Development Strategy (MGDS II) and the Economic Recovery Programme (ERP).
Reads the World Bank statement: “Among the reforms to strengthen macro-economic and public finance management are the actions taken to strengthen fiscal discipline to entrench macro-stability through the development of a plan to clear domestic payment arrears and ensure no build-up of new arrears.”
The World Bank says in the area of laying foundation for stronger growth and protection of the poor, the budget support recognises the measures taken to enhance agriculture productivity and diversification, improve energy efficiency and the regulatory environment, improve efficiency in the provision of social safety nets and strengthen the country’s statistical capacity.
In July 2012, the Bretton Woods institution also provided Malawi with a $150 million (about K50.7 billion) package to support government with its reform programme to stabilise the economy.
Out of this amount, $50 million was budget support in the form of a Rapid Response Development Policy Grant which focused on efforts to restore macro-economic stability, improve functioning of the petroleum market, among others.
—See World Bank Press Statement Here
