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Resource abuse worries Malawi donors

24 July 2012 Nation

Malawi’s major donors are concerned about continued abuse of public resources and have urged the Joyce Banda administration to improve efficiency in financial reporting and control on taxpayers money.

Outgoing co-chairperson of the donors, under the Common Approach to Budget Support (Cabs), Andrew Mwaba, who is also country representative for the African Development Bank (AfDB), raised the concerns in Malawi’s capital, Lilongwe, last week in a statement.

The statement was released on Friday on the sidelines of a signing ceremony of a recent grant agreement totalling $40 million (about K10.7 billion) with Malawi for budget support.

Said Mwaba: “Cabs partners have raised concerns related to public finance management, particularly on the overall transparency and accountability in the use of public resources.”

The statement comes at a time when people are waiting for Banda’s administration to implement a variety of cost-cutting measures and control public expenditure, to reverse the situation that prevailed during the late Bingu wa Mutharika’s regime.

Mwaba said it is essential to ensure proper functioning and effectiveness of the National Audit Office (NAO).

He also said government needs to take necessary steps to ensure that issues around the Anti-Corruption Bureau (ACB) are resolved so that the accountability institution operates effectively.

Said the co-chair: "These institutions [NAO and ACB] will also be key to improving donor confidence in governance and accountability in Malawi ."

Mwaba said donors are of the view that sound public finance management systems remain key to successful and effective implementation of poverty reduction strategies.

He also urged government to put in place strong financial control systems to avoid accumulation of domestic arrears which he said are currently posing a substantial challenge to management of public finances.

According to Mwaba, donors also want government to draw up a transparent medium-term arrears settlement plan.

Mwaba, however, commended the new administration for taking steps so far in addressing fundamental principles for the provision of budget support.

In his remarks, Finance Minister Ken Lipenga said government fully understands the need for sound macro-economic management and good governance, including sound public financial management.

Said Lipenga: "We believe that this tenet is one of the most critical underlying principles for budget support cooperation in Malawi."

He assured the donors that government, through his ministry, has put in place a specialised unit which will champion and coordinate various public finance and economic management reforms in government.