Malawi Jilts IMF on COVID-19 Funds Accountability

Malawi Jilts IMF on COVID-19 Funds Accountability

Amid chatter of gross pilferage of money meant for COVID-19 interventions and arrest galore over the same, the International Monetary Fund (IMF) has expressed worry over Malawi government’s failure to report on the expenditure of disbursed funds in clear disregard of conditions attached.

Characterized by an undoubted diplomatic tone, the inference of the statements could be bluntly interpreted for an expression of worry over government’s failure to stay the course on donor partners’ stipulated conditions on budget transparency, procurement procedures and reporting mechanisms.

This came up during a public debate – comprising of online and in-person participants- on Thursday.

IMF Resident Representative Farayi Gwenhamo said the only report they have seen is the MK 6.2 billion audit report.

Said Gwenhamo:

At this stage, we are discussing with the authorities but I can confirm that we have not received any report on how the IMF support was utilised. As some may be aware or noted, there were some reporting requirements attached to the disbursement of the funds. These were covering procurement, budget transparency and auditing.”

She stressed that under the conditions of the Rapid Credit Facility, government of Malawi was obliged to report COVID-19 related expenditures every month.

With the IMF having made their first disbursement in May of last year, the Malawi government has been non-compliant on financial reporting for almost close to a year now.

As far as reporting is concerned, the IMF have only seen the report now in the public domain after it got leaked a couple of weeks ago.

The first disbursement from the IMF to Malawi government was in May 2020 where US $ 91 million was provided.

“This was all for budget support to procure COVID-19 related materials and was remitted directly to the Reserve Bank of Malawi. The second disbursement was in October which was about US $ 102 million. US $ 30 million was for budget support and the rest was for COVID-19 related purchases,” Gwenhamo added.

She also stated that contrary to popular belief, no money allocated by the IMF was meant for lending to SMEs.

Commenting on COVID-19 expenditure, Economic Advisor at the Foreign, Commonwealth and Development Office in Malawi, Chris Pearce, stressed the need to enhance trust by adherence to set reporting standards.

“We were disappointed that the set reporting standards were not followed,” he stated, making reference to the infamous cashgate in which billions were looted from government coffers.

Government officials at the ministry of finance are yet to clarify the reasons behind the failure to meet the required reporting systems.

Meanwhile, President of the Economics Association of Malawi (ECAMA) Lauryn Nyasulu hailed the conversation around the theme: “Promoting Accountability and Transparency in the use of COVID-19 Funds provided by the International Financial Institutions (IFIs)”.

She said the debate which is part of “The People, Power and International Financial Institutions Project”, funded by Open Society Foundations will help identify gaps in public financing thereby providing avenues for improvement.

“This has been an eye opener. There are issues that have come out that going forward, various stakeholders will begin to ask tough questions and new make decisions,” she added.

Our journalism is supported by the International Media Support (IMS) with funding from the European Union. (EU).

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