Donors have vowed to continue holding financial aid to Malawi following the cash gate scandal which started in 2005.
Britain’s Department for International Development (DfID) director in Malawi, Jen Marshall, said donors including Britain are still lacking trust in Malawi government financial systems.
She said Britain and other donor are using off-budget support which she said, does not use government financial systems although the money goes to other government systems
Marshall made the remarks during the High-level Forum on Development Effectiveness in Lilongwe on Wednesday when she defended the recent increase in off-budget support by Malawi’s development partners in the 2015/16 National Budget rolled out on July 1.
With lack of trust in government financial systems at the moment, this mix now includes higher levels of off-budget support,” she said.
Revelations of the plunder of public resources at Capital Hill which British forensic auditors, Baker Tilly, established to be K24 billion between April and September 2013.</forced donors to withdraw budgetary support and have seen a policy shift among most bilateral donors in favour of delivering aid through off-budget support.
And PricewaterhouseCoopers (PwC) report from the examination of public finances from January 1 2009 to December 31 2014 released last month, found that at least K577 billion—around 30 percent of total expenditure during the five-year period—was abused and a forensic audit of the dubious transactions is yet to be conducted.
Marshall explained that through the off-budget support, development partner’s alignment continues behind activities and objectives in the national development, sector plans, ministry strategic plans, national reform plans and district development plans.
Minister of Finance, Economic Planning and Development Goodall Gondwe said government has been making improvements in the management of public finance.
The DfID boss said they have noted the launch of reforms but stressed that implementation s critical for donor confidence in national systems.
