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| Business |
| Stanbic says aid hopes foggy before December |
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by
Aubrey Mchulu, 10 November 2004
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11:34:01
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Stanbic Bank Malawi said this week it does not see the country receiving further budgetary support in the remaining two months of the year as indicated in the International Monetary Fund (IMF) staff monitored programme.
In its economic newsletter dated November 5, Stanbic said that would be the case because most of the donor pledges were subject to approval by authorities in their respective countries.
Finance Minister Goodall Gondwe’s K89 billion budget is expected to be financed by donors to the tune of K28 billion while local revenue was estimated at about K51 billion.
Initially, Gondwe had pegged his budget at K85 billion before adding K4 billion whose source was not disclosed.
Donors are still clinging to more than US$100 million in budgetary support pending a review of the IMF’s Staff Monitored Programme this December.
The Malawi government must establish a track record of good fiscal management before aid comes in.
“Satisfactory conclusion of a Staff Monitored Programme should unlock further foreign exchange resources,” said Stanbic Bank Malawi’s parent company, Standard Bank.
However, it is still not clear whether the money will be released although some donors like Britain and the World Bank have released pockets of aid, which, however, are too little to improve the country’s balance of payment position and help stabilise the economy.
Stanbic also said the closure of tobacco selling season in Lilongwe and Mzuzu later this month and food shortages, among other factors, will test the kwacha’s stability, especially against the US dollar which most commentators believe is artificial.
“In the short-term, domestic prices will [also] be under considerable upward pressure from recent increases in fuel prices,” says Stanbic.
Stanbic’s fears of foggy aid hopes before December come at a time when the IMF mission led by John Green was expected in the country from yesterday to November 23 to continue with its assessment of the country’s microeconomic performance since it was put under the Staff Monitored Programme.
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