Corruption: IMF approves $18m to Malawi

Lilongwe, March 24, 2015 The International Monetary Fund (IMF) says it will provide $18.1 million to Malawi after its government promised to tackle corruption.

IMF said on Tuesday that the approval was due to the suspension of aid by donors to the country following large-scale graft involving public funds.

Donors led by former colonial ruler Britain have withheld direct aid to the southern African nation for more than a year over a corruption scandal.

Top government officials and ministers were alleged to have siphoned millions of dollars from the public purse.

“Malawi’s macroeconomic outlook and performance under the IMF-supported programme was significantly damaged by a large-scale theft of public funds and by policy lapses in the run-up to elections,” the IMF said in a statement.

“The breach of governance resulted in the suspension of budget support from donors, which has led to increased recourse to central bank financing, accumulation of domestic arrears, exchange rate depreciation, and high inflation.”

The country’s Finance Minister, Goodall Gondwe, said he hoped the IMF move would unlock more aid.

“This will sure give confidence to our traditional donors to come in because (lack of aid) is crippling our economy,” Gondwe told Reuters.

Foreign aid has traditionally accounted for about 40 per cent of Malawi’s national budget. (Reuters/NAN)