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NEWS RELEASE
Malawi gets $50million budget support from the World Bank
WASHINGTON, May 28, 2013 The World Bank Board of Executive
Directors today approved a US$50million grant to the Malawi
Government for general budget support.
This is the first in a programmatic series of three Economic
Recovery Development Policy Operations(ERDPO). The focus of the
series is to strengthen macroeconomic and finance management and
layfoundation for stronger growth and protection of the poor. Each
of the ERDPOs will be a single tranche
operation.
Government has committed to stay the course of macroeconomic and
structural reforms undertakensince May 2012 to support the recovery
process. The Bank is therefore providing the much neededresources
to help sustain these reforms and help ease the emerging fiscal
pressures. says SandraBloemenkamp, Country Manager for Malawi. This
Program also seeks to consolidate reformssupported by the IMFs
Extended Credit Facility.
The budget support is in recognition of reforms to support the
implementation of the Second MalawiGrowth and Development Strategy
and the Economic Recovery Program. Among the reforms tostrengthen
macro-economic and public finance management are the actions taken
to strengthen fiscaldiscipline to entrench macro-stability through
the development of a plan to clear domestic paymentarrears and
ensure no build-up of new arrears. To enhance efficiency and
transparency of the public
finance management, reform actions focus on strengthening budget
policy framework and improve itsmedium-term orientation,
strengthening external oversight and internal controls on public
finances, andenhancing efficiency and value for money in public
procurement, especially fertilizer procurement underthe Farm Input
Subsidy Program.
In the area of laying foundation for stronger growth and
protection of the poor, the budget supportrecognises the measures
taken to enhance agriculture productivity and diversification,
improve energyefficiency and the regulatory environment, improve
efficiency in the provision of social safety nets andstrengthen the
countrys statistical capacity. For instance, actions taken to
review electricity tariffs on aregular basis would help ensure they
are cost reflective, and the financial position of the power
utilitycompany is strengthened, in addition to creating a conducive
environment to attract independent powerproducers.
Another key area of reform recognised under the DPO is the
approval of the National Social SupportProgram which aims at
strengthening linkages between existing social programs. This is
expected tocreate an enabling policy environment for the
implementation of social protection interventions tomaximize their
impact.
Earlier in July 2012, the Bank provided Malawi with a
$150million package to support government with itsreform program to
stabilize the economy. Of this amount, $50million was budget
support in the form of aRapid Response Development Policy Grant
which focused on efforts to restore macroeconomic stability,improve
functioning of the petroleum market and create incentives to
exporters, including smallholder
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tobacco farmers; and strengthen social protection interventions
to cushion the poor and most vulnerablegroups from shocks. The Task
Team Leader for budget support is Ms. Appolenia Mbowe.
Contacts:In Washington:Aby Toure+1 202 473
8302,[email protected] Lilongwe: Zeria Banda, (+265-1) 770
611,[email protected]
For more information, please visit:www.worldbank.org/malawi
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