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Thursday, June 13, 2024

GOD’S SMILE AT MALAWI: World Bank boosts financial support with $80 million grant

World Bank on glass building. Mirrored sky and city modern facade. Global capital, business, finance, economy, banking and money concept 3D rendering animation.

The World Bank has bestowed a significant financial blessing upon Malawi, providing an additional $80 million (approximately K139.1 billion) to bolster the implementation of the Malawi Public Finance Management (PFM) Strategy.

According to a press statement released by the Bretton-Woods Institution, the grant, disbursed through the International Development Agency (IDA), aims to enhance resource mobilization, budget execution, and transparency in public finances.

The funds will be unlocked upon the achievement of specific indicators, including an increase in domestic value-added tax (VAT) revenue collection, a decrease in variance between approved budget and expenditure outturn, and an increase in contract data accessible to citizens.

World Bank Country Director for Malawi, Zambia, Zimbabwe, and Tanzania, Nathan Belete, emphasized the significance of this program, stating: “The Fiscal Governance Program for Results presents a new and innovative financing instrument that will enable the government to unlock additional resources in a more predictable manner over the next five years, while also serving as a platform for harmonized planning, coordination and utilization of resources for service delivery.”

Belete acknowledged that Malawi has faced significant challenges, including limited fiscal space and low forex reserves, despite the introduction of a new IMF program and the recent World Bank DPO series.

He expressed optimism that this funding will help address these issues.

Minister of Finance, Simplex Chithyola Banda, welcomed the support, stating: “The total expenditure required by our PFM Strategy is approximately $146 million. With this IDA financing of $80 million, we are now slightly above 50 percent of the required resources.

“I am very optimistic that, with this, we will create a solid foundation for our fiscal governance and sustain policy reforms throughout the span of the PFM Strategy implementation.”

This funding package complements the Extended Credit Facility program signed with the International Monetary Fund and the World Bank’s Development Policy Financing, demonstrating a collaborative effort to support Malawi’s economic development.

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