By Samuel Kalimira & Taonga Sabola:
European Union (EU) Ambassador to Malawi Rune Skinnebach has said he is in contact with his superiors to consider resuming direct budget support to Malawi following the International Monetary Fund (IMF)’s approval of a four-year $174 million Extended Credit Facility (ECF) programme for Malawi.
Skinnebach expressed optimism that this might start in the next financial year.
He said this during a breakfast with the media in Mzuzu on Saturday, adding that the EU would continue to support the Malawi Government in cushioning people from the negative effects of the recent 44 percent devaluation of the Kwacha.
- Advertisement -
“The IMF programme on ECF is one of the boxes which need to be ticked for resuming budgetary support and I am succeeding in convincing them [superiors] that it is now time to resume [offering direct support]. So, I am very optimistic that, come next fiscal year, we will press the right button for support,” Skinnebach said.
- Advertisement -
However, the EU ambassador said there are still trade imbalances in the country, saying that can only be corrected through production, which will increase exports.
He said opening up investments would be a short-term solution to the problem.
Skinnebach said for there to be sustainable change, Malawi has to create a conducive environment for foreign investors.
The ambassador also asked journalists to continue tracking public expenditure.
- Advertisement -
Government spokesperson Moses Kunkuyu said the position taken by the EU is commendable, adding it has shown that efforts by the government to improve the economy are bearing fruit.
“The move by the EU and other cooperating partners to resume direct budgetary support after a decade reaffirms the goodwill that is there towards Malawi when leaders display their serious resolve to deal with issues that have led to our economic malaise in the past. The spirited fight against corruption, as displayed by President [Lazarus] Chakwera, is a great confidence booster to donors and cooperating partners,” Kunkuyu said.
In another development, Skinnebach has said time has come for Malawi to stop relying too much on development partners for its economic wellbeing.
Skinnebach said this on Saturday on the sidelines of Bwaila Media Club annual general meeting in Lilongwe.
He said the key to Malawi’s economic transformation lies in its ability to attract foreign direct investors.
According to Skinnebach, there is a tendency in Malawi to rely too much on development partners to impact Malawi’s development.
He said development partners have been there for so many years, with the EU being in Malawi since 1976.
“If we are to realise Malawi 2063 [vision goals], and I hope we are, then we need to have foreign direct investment.
“And it’s not enough to invite them [foreign direct investors] to come. We need to be competitive and that is where I said we need to review the legislative framework. We need to review the tax regime and we need to look at Malawi relative to neighbouring countries or counties in the sub-region and say: Is Malawi really competitive?
“Are we the beat to attract foreign direct investment or will investors go elsewhere? If we think they will go elsewhere, then we need to adjust the parameters,” Skinnebach said.
According to Skinnebach, the media has a critical role to play— especially when the country is passing through a difficult situation and is heading towards the 2025 elections— through objective reporting.
He said the media has a responsibility of holding those in power accountable for their decisions, promises and statements.
Presenting the mid-year budget review statement to Parliament on Monday, Finance Minister Simplex Chithyola Banda said, in total, following the ECF approval, Malawi is expected to receive resources amounting to $240 million, which is an equivalent of K408.0 billion, between now and the end of March 2024.
Chithyola Banda said, over and above this amount, Malawi is expected to be assisted by donors through front-loading of project disbursements to cushion the population to the tune of $146 million, or K248.2 billion, through the purchase of fertiliser, maize, pharmaceuticals and importation of raw materials for the private sector.
During the AGM, Bwaila Media Club members elected Malawi Red Cross Communications and Resource Mobilisation Specialist Felix Washoni as its new president.
Washoni takes over from Horace Nyaka, who has been at the helm of the club for the past three years.
Washoni is being deputised by Nation Publications Limited reporter Clement Chinoko.
In an interview after being elected, Washoni said he would work hard to take operations of Bwaila Media Club to another level.
Moses Chitsulo retained the position of secretary general while Doreen Sonani retained the position of treasurer.
Jacqueline Nhlema was elected vice general secretary while Clement Msiska, Bridget Mwanoka, Misheck Kauma and Robert Chandilira were voted as executive committee members.
