The Tonse administration has started receiving assurance of direct budgetary support from the country’s development partners.
The latest commitment comes from the World Bank which is set to provide 160 million dollars towards the 2023-2024 national budget.
Finance Minister Sosten Gwengwe revealed during the presentation of the proposed national budget in parliament last Thursday.
“The Government is also engaging the World Bank and the European Union for possible budget support. Among others, the World Bank has committed about US$160 million, approximately MK164.8 billion for a Development Policy Operation budget support, while the EU will announce its committed amount as discussions continue,” said Gwengwe.
Since the suspension of direct budgetary support by a group of multilateral donors in 2014, Malawi lost up to 40 % of its budget revenues.
The authorities have since been struggling to fund the financial blue print, with huge deficits annually, contributing to further growth of debts.
Some of the major donors that suspended direct budgetary support include the World Bank, European Union, and United Kingdom.
Most of the donor partners have been channeling funding into the country through specific projects as a sign of their continued support for government.
Gwengwe reveals that talks are on the table with different multilateral partners for resumption of direct budgetary support.
The finance minister is of the view that such talks and commitments are an indication of restoration of trust by the corporation partners.
“This shows that the current Administration is regaining the trust/donor confidence in its systems, especially public finance management, including the fight against corruption and other Public Finance Management reforms taking place,” Gwengwe added.
Meanwhile, the government is facing a K1.01 trillion deficit in its proposed K3.87 trillion budget for the 2023/24 financial year.