Corruption could endanger HIPC support

World Bank Resident Representative in Lilongwe Robert Liebenthal has said that there is a need for government to adhere to established poverty reduction programmes, local media reported on Monday. Liebenthal emphasised that any serious departure on International Monitory Fund (IMF) and World Bank supported poverty initiatives will put Malawi’s Heavily Indebted Poor Countries Initiative (HIPC) qualification in jeopardy. He was speaking at a HIPC Initiative Conference in Lilongwe on Friday which was convened by the Economic Association of Malawi (ECAMA) in conjunction with UNICEF to discuss the effects of HIPC relief that Malawi is supposed to enjoy.

Malawi qualified for the HIPC initiative in December last year and is due to receive US $1 billion in debt relief over a period of 20 years. The IMF and the World Bank will contribute US $147.7 million to the HIPC relief. At the meeting it was alleged that government is failing to provide the nation with a detailed explanation as to how it used over US $14.7 million interim money Malawi received from December last year to June this year after it qualified for the HIPC initiative.

Civil society organisations at the meeting on Friday took government to task for it’s failure to properly account for the money and also the lack of detailed information on how it is going to use another US $58.7 million Malawi is to receive this fiscal year alone as HIPC debt relief. Although Deputy Finance Minister Jaan Sonke said HIPC money had been used in purchasing drugs, training nurses and for primary health care, civil organisations said the information was not comprehensive enough.