The Federal Republic of Germany has signed a Financial Cooperation Agreement with the Malawi Government which has seen Germany providing financial support worth €35 million [about K30 billion] to Malawi.
The funds are meant to help Malawi address key challenges in social economic development, especially in sectors of health, education and private sector development.
German Ambassador to Malawi, Juergen Borsch, said the Malawi Growth and Development Strategy III recognises the three areas targeted in the agreement as prerequisites in order to build a productive, competitive and resilient nation; hence, the move.
When asked why such support could not be offered to Malawi through the National Budget, Borsch said such programmes make it easier to track funds and check, if they are used for the intended purpose.
“Budget support is not in the picture. We have only done this in very rare cases in the past. I have commended the government on its fabulous policy on macro-economic stability.
“A lot has been achieved but that does not change our approach. We have had the same good experience with our joint programmes in various sectors and this is the best way to see where the money goes and to see the effect as soon as possible,” Borsch said.
Minister of Finance, Economic Planning and Development, Goodall Gondwe, said the assistance will go a long way in helping to reduce social challenges facing Malawi. They include prevailing high teacher-pupil ratio in primary schools, lack of access to basic health services, among others.
On lack of confidence for development partners to finance the budget, Gondwe said it is not only in Malawi but an initiative the international community has taken all over the world.
“We are short of budget support yes but not because of Cashgate only but also [because of] policies in these countries. Zambia, Tanzania and Mozambique do not have budget support as well.
“I must admit that we get what they call dedicated grants and these are grants that come with dedicated projects in mind. For instance, this money from Germany has been designed to go towards the health and education sectors and we will agree with them about project to be undertaken,” Gondwe said.
The €35 million is part of a €113 million commitment the German government made in November last year to Support Malawi in the next two years in enhancing health and education services, private sector development, public finance management and the fight against hunger.
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