By Kondanani Chilimunthaka
Favourable and sound economic policies by President Lazarus Chakwera that have attracted resumption of foreign donor support for Malawi have not spared the favors from the World Bank which has announced the release of at least K232 billion for Direct Budget Support to the country.
In the communication made available from Washington in United States of America on 12th December, 2023, the World Bank through its Country Director for Malawi, Zambia,Zimbabwe, and Tanzania, Nathan Belete said it has approved the Bedgetary Support Package to support Reforms for Growth and Resilience of Malawi.
“For the first time since 2017, the World Bank is providing Malawi with budget support that will help the country enhance fiscal sustainability and transparency, stimulate private sector-led growth, and increase resilience to shocks.
The government of Malawi has demonstrated commitment to address macroeconomics imbalances, unsustainable debt, and longstanding structual and business environment constraints inhibiting private sector-led growth. It is also taking robust steps to restore macroeconomic stability through addressing long-standing fiscal, monetary, and external sector imbalances as reflected in the new Extended Credit Facility with the International Monetary Fund (IMF)” Reads part of the News Release from Washington.
In his words, Belete said his organization applauds Malawi’s authorities for taking tough but necessary decisions to stabilize on acute macro-economic crisis.
“I am pleased to respond with a substantial budget support operation that supports an ongoing program of reforms” Said Belete.
Responding to the step taken by World Bank, Malawi’s Minister of Finance and Economic Affairs, Simplex Chithyola Banda said the operation is a significant milestone in Malawi’s ongoing reform journey.
Added Chithyola; “It shows the increased confidence that the World Bank has in our ongoing efforts to reform the economy and become a self-reliant, industrialized upper middle-income country by 2063”.
The World Bank Board of Executive Directors approved the Malawi First Growth and Resilience Development Policy Operation with Catastrophe Deferred Drawdown Opinion (Cat-DDO), a $137 million package which consists of an immediate release of $80 million to support reforms and recovery, and a $57 million CAT-DDO that can be triggered in the event of crisis.
