Reining in overspending reaps rewards

Efforts by Malawi's new government to rein in overspending and tackle corruption continue to pay off as international financiers lend their support to antipoverty measures. The World Bank (WB) this week announced the disbursement of US $25 million to support the country's Fiscal Management and Accelerating Growth Programme (FIMAG), which is geared to improving service delivery, bolstering fiscal management and accelerating agricultural growth. In statement on Monday, Callisto Madavo, World Bank Vice President for the Africa Region, said the Bank welcomed measures by the new administration of President Bingu wa Mutharika "to bring economic performance back on track and tackle governance issues". In 2001 the International Monetary Fund barred budget support for Malawi as a result of government overspending. Major Western governments also demanded greater transparency and froze their funding. Up to 80 percent of Malawi's development budget is provided by donors. "As you are aware, the World Bank and other donors suspended aid to Malawi in the past three years for some reasons which I do not know. They have now accepted to give us financial support. The next US $25 million will be given to us in December [2004], depending on how we are going to perform," Mutharika told the audience at a rally on Sunday. The release of US $25 million by the WB is expected to boost Mutharika's 2004/05 budget, which is currently being discussed in parliament. Since assuming power earlier this year the new president has sought to convince the international donor community of his government's commitment to fiscal discipline and stamp out corruption. Christopher Wraight, political secretary of the British High Commission, said that while the UK acknowledged the achievements made so far against graft, further measures should be taken to ensure greater transparency. The outgoing Norwegian ambassador to Malawi, Asborjon Eidhammer, said corruption should be addressed simultaneously to making improvements in education and agriculture. "The European Union (EU) will be waiting to see whether Mutharika will put into action what he has promised Malawians," said the EU's Press and Information officer, Charles Undulu.