World Bank Provides $80M for Malawi Fiscal Reforms
Key implementing agencies include the Ministries of Finance, Revenue Authority, public procurement bodies, accountant general, registrar, and audit offices.
WASHINGTON - The World Bank is providing $80 million in new financing to support fiscal governance reforms in Malawi aimed at improving resource mobilization, budget execution, and transparency of public finances, writes Winston Mwale.
The financing, structured as a results-based Program for Results, will help implement Malawi's Public Financial Management Strategy for 2023-2028, according to a World Bank statement released Thursday.
Funds will be disbursed upon achievement of indicators like increasing domestic value-added tax revenue collection, reducing variance between approved budgets and spending, and boosting citizen access to procurement data.
"Low forex reserves and limited fiscal space have been major challenges for Malawi," said Nathan Belete, World Bank Country Director.
"This innovative financing will enable the government to unlock additional resources predictably over five years while strengthening controls on spending through government systems."
The program complements recent International Monetary Fund and World Bank budget support by incentivizing strategic reforms to enhance fiscal governance. It builds on successful previous results-based financing that spurred policy progress.
"With this $80 million IDA financing, we are slightly above 50% of the $146 million required for our PFM Strategy," said Finance Minister Simplex Chithyola Banda.
"I'm optimistic we'll create a solid foundation for fiscal governance."
Key implementing agencies include the Ministries of Finance, Revenue Authority, public procurement bodies, accountant general, registrar, and audit offices.
The five-year program provides fiscal incentives to progressively strengthen government capacity in mobilizing domestic resources, efficient spending, debt management, transparency and accountability measures.
It supports Malawi's wider public finance management strategy aimed at restoring credibility, creating an enabling environment for effective development, and attaining sound financial discipline for sustainable service delivery.