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| EU not supporting budget |
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by
Joseph Langa, 24 September 2004
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09:53:34
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The European Union (EU) will not contribute to the national budget which was passed by Parliament Thursday but Finance minister Goodall Gondwe said that will not affect government operations.
Gondwe confirmed in an interview that the EU will not contribute to the balance of payment (BOP) support because they indicated that they will decide on the figures next year.
But he claimed the development will not affect his budget because Treasury did not include the allocation from the EU.
“We are not including EU money. They have told us that they will decide on the amount next year,” said Gondwe.
“The total amount we are expecting is [$50 million]. We have already received [$23 million] from the World Bank and we are expecting another [$23 million] from them. The rest will come from the British government”.
The British government confirmed in a statement Thursday that they will immediately release £5 million to the government of Malawi which was withheld during the 2003/2004 fiscal year due to poor financial management by the previous regime.
Britain says the money will be released following improved economic management noted by their International Development Secretary Hilary Benn, and Minister for Africa at the Foreign and Commonwealth Office Chris Mullin, who held discussions with President Bingu wa Mutharika.
“The UK will also consider a new three-year budget support agreement for £55 million, subject to further progress with economic reform,” reads the statement.
“In addition, the UK is considering making available an additional £5 million for food security programmes targeted at poor people who have suffered a bad harvest and are too poor to buy food,” it added.
Gondwe said his budget has also excluded the allocation from the Norwegian government but he said if the money comes it will be used to reduced domestic debt.
EU Press and Information Officer Charles Undulu said their budget support programme ended in February and they are currently negotiating the new programme with the government. The delegation was supposed to contribute about $9 million.
Malawi Economic Justice Network (Mejn) deputy national coordinator Mabvuto Bamusi said it is very doubtful that the budget did not include the allocation from EU because the delegation is a major donor under the Common Approach to Budgetary Support (Cabs) group.
“We anticipated such problems because the minister has over-relied on the donors on his budget,” said Bamusi.
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