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Malawi Donors Want New, Tougher Conditions Before Resuming Aid

Parliament of Malawi (Courtesy: Embassy of the Republic of Malawi in Washington, DC)

Malawi’s finance minister Goodall Gondwe said the country’s foreign donors have imposed new and tougher demands as conditions for the resumption of aid to his country.

Malawi lost up to 40 percent of the budget support aid it was receiving from foreign donors when the European Union, the World Bank, and the United Kingdom suspended aid last year because of the corruption scandal, known as “Cashgate,” which diverted about $32 million from government accounts.

Gondwe said the new conditions are very specific.

"For example, to make sure that we decentralize our subsidy, half of it to be 'handled by the private sector.' Number 2, they want us to publish a bill on access to information that the government should agree to be giving information to the public. Then they want us to look at our wage administration to ensure that we expunge ghost workers. And we must do that if we are going to get support from them,” he said.

Gondwe said the Malawian government has put in place a zero-aid budget for 2015/16 as part of an attempt to win back the trust of major donors who do not want to see their money wasted.

“Our policy now is to embark on a stringent limitation of our need for budgetary support. We are undergoing some stringent adjustments to do so. But apart from that, we are also, like anybody else, are embarking on a public finance management reform program, which is also quite involving,” he said.


He said Malawi is not going around the globe looking for aid. “But historically, our budget, like any other country in the region, we have been provided with budgetary support to increase our budgetary expenditure. That is what has been withdrawn, and that is what the World Bank and EU have pledged to continue, but they will continue only on condition that we do those things.”

A British government-funded forensic audit found that money from the budget may have been used to support electoral campaigns. It reportedly said nine individuals who received government money, either directly or through close relatives, without providing goods or services, were listed by the Malawi Electoral Commission as election candidates.

A number of senior government and military officials were arrested in connection with the Cashgate scandal.