Donors threaten to block Malawi aid

[iolsa]

Blantyre, Malawi - Foreign donors on Thursday threatened to withhold budget aid to Malawi unless the government got serious about rooting out widespread corruption and restoring fiscal discipline.

“We will not be able to resume support through government systems until we have a clear assurance, independently verified, that our resources are all being used for their intended purpose,” said Sara Sanyahumbi, who heads the donor grouping which includes European countries, the European Union and the World Bank.

“Now is the time for the government to take the initiative, take  the action that is needed to address the weaknesses in the systems,” she added.

Malawi last month arrested two public officials for embezzling $15 million from public coffers, the latest in a string of graft cases that have raised the ire of the international donor community.

Dubbed cashgate, the scandal prompted President Joyce Banda to fire her entire cabinet, while Norway suspended its budget aid to the country.

Banda's actions have elicited death threats, and a corruption-busting official was shot and wounded outside his house in September.

The plunder of state funds had “seriously dented the confidence in the government's financial management system,” said Sanyahumbi, who is also the country head of Britain's Department for International Development (DfID).

At a review meeting in the capital Lilongwe, Sanyahumbi said that despite years of donor support “all there was to show for it were systems failing the people of Malawi at all levels.”

“We see it very clearly as the government's responsibility to tackle these issues,” she added.

Donors are not scheduled to disburse pledged aid until next February following an IMF review, but they warned on Thursday that the next aid tranche depends on government efforts to fight the rampant corruption.

The grouping has pledged up to $150 million to Malawi this year.

The impoverished southern African nation, one of the world's poorest, relies on donors for 40 percent of the state budget.

Sapa-AFP