LILONGWE (Muchanakhwaye Khwepeya, Malawi NewsNow ) – Minister of Finance, Economic Planning and Development Goodall Gondwe has said with no sign of badly needed foreign aid and investment to help the cashstrapped government, there is still optimism to achieve the turnaround the country require.
Gondwe says Malawians should not lose hope, the economy will recover in time, with the right conditions for the country.
“The trouble is it has to be done now, as far as the public is concerned, but it may not be done now but we will do it because I have faith in the system, in my country,” said Gondwe in a newspaper interview.
“ If the Tanzanians can do it, if Rwanda can do it, I don’t see any reasons why Malawians should not do it?” Gondwe said.
Gondwe said the outlook of Malawi economic situation is still grim but he is pursuing a short-term economic recovery plan focusing on budget cuts on unnecessary expenditures.
He admitted that the government is feeling the effects of the absence of budgetary support and dwindling grants as indicated by the heavy borrowing of the 2014/15 financial year and incurring of arrears.
Donors provided about 40 percent support in the recurrent budget and about 80 percent in the development budget.
In case of the development budget, donors rechannelled their assistance to Malawi through non-governmental organisations.
Gondwe said he was positive that multilateral institutions such as the World Bank, the European Union (EU) and the African Development Bank (AfDB) would provide budgetary support of between US$110 million (K80 billion) and US$120 million (K88 billion) by March 2017 to support the current K1.2 trillion fiscal plan.
He said: “We are expecting this year the World Bank and the European Union to provide us with budget support. They have given us a lot of conditionalities and we are in the process of satisfying them. We are expecting $80 million from the World Bank and about $30 million from the EU.”
The Democratic Progressive Party (DPP) administration has in the past insisted that it can do without budgetary support on the recurrent side of expenditure and introduced a zero aid budget during the second Bingu wa Mutharika administration.