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| National |
| Debate on CPA saves Malawi |
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by
Mabvuto Banda, 21 March 2004
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17:35:08
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Britain has disclosed that had Parliament decided not to debate the Corrupt Practices Act (CPA) last week, Malawi would have faced serious aid implications.
The British High Commission political press/public affairs officer Christopher Wraight said Sunday Britain was pleased that as agreed by the IMF and World Bank, Parliament debated the revisions to the Corrupt Practices Act.
“Had the Bill not been presented to Parliament as agreed with the IMF and World Bank, it would have had serious implications for international aid flows to Malawi,” Wraight said in a statement.
“As we stated many times prior to the adoption of this Act, we were in favour of all the Law Commission recommendations being included in the new legislation. This has not happened. However, we recognise that provisions which have been included go a long way to making the ACB more effective in the fight against corruption,” he said.
The British government also applauded the widening of the definition of corruption, and the increase in powers of the ACB. Wraight said that they are pleased that the respective roles of the DPP and Parliament have been clarified in those instances where consent to prosecute is withheld.
According to the amendment the DPP will now be required to substantiate his/her decision within 30 days after the ACB submits its recommendations.
IMF unlocked aid with strict conditionalities to Malawi in October last year after three years of suspension because of government’s huge appetite for spending, bad governance and high level graft.
The amendments to the CPA, commercialisation of Admarc, and the implementation of the Public Procurement Act were agreements which government undertook with the IMF to safeguard the continuance of budgetary aid.
But despite that, the country has until now been treading on a thin line between keeping the Poverty Reduction Strategy Paper (PRSP) programme alive and it being suspended due to failure to meet certain conditionalities.
A National Bank of Malawi (NBM) review in January this year, indicated that a go slow attitude by donors is likely to continue even if some of the above conditionalities are met because some economic targets set are harder to achieve within the prescribed time.
The report observed that a difficult environment is deliberately being created by the international community to conveniently withhold budgetary support until after the elections.
“This is because IMF and donors can then have the comfort of making agreements with an administration which has a new five-year mandate rather than one with a few months to go,” said the NBM
Meanwhile, the IMF review mission is still in the country discussing with government and is expected to take into account a range of factors when assessing the prospects for continuation of their programme.
Wraight said the UK and other donors are committed to linking their budgetary aid programmes to the IMF facility.
“Renewal of budget support payments by the UK to Malawi, therefore, depends in large part on the conditions of the IMF review being met,” he said.
Government is expecting the first tranche of $25 million from the structural adjustment credit of $50 million from World Bank by next month, and another $18 million from the IMF and EU. Britain and the African Development Bank will disburse $20 million and Norway and Sweden $3 million each.
Finance minister Friday Jumbe who successfully pushed through his K11 billion supplementary budget, blamed the K3 billion overexpenditure on the shortfall on donor pledges which forced government into domestic borrowing.
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