February 18, 2004

US$ 25 million to be received from World Bank

Malawi can expect the first half of a US $50 million structural adjustment credit from the World Bank next month, a bank official has announced. The second part of the credit will be given to Malawi in October, subject to certain conditions, which include commercialisation of the Agricultural Development and Marketing Corporation (ADMARC), the Bank's country economist, Maxwell Nkwezalamba, has said. Restructuring ADMARC would entail closing down its "unprofitable markets", including those, which cater to the rural communities in Malawi [!]. The government was currently examining several models, such as "hiving off" unprofitable markets to a state body, or calling for tenders from the private sector.

Expressing confidence in the Malawian government's handling of expenditure, Nkwezalamba pointed out that the British government was expected to pump at least U$19 million into the country in the coming months, while a further U$19 million was expected from the European Union in the next few weeks, with U$5 million more from Norway.

After a review of the government's economic performance, the International Monetary Fund (IMF) broke a three-year aid freeze on Malawi late last year and released a U$ 9.2 million from a U$ 64.5 million concessional Poverty Reduction and Growth Facility originally approved in 2000. The IMF is conducting its second quarterly review in March and is expected to announce the next disbursement shortly. Aid was frozen by the IMF and major Western donors in a response to government overspending and lack of transparency. Up to 80 percent of Malawi's development budget is funded by donors. (IRIN)

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