USA Suspends $350m Malawi Grant
President Bingu wa Mutharika’s political arrogance as well as his government’s continued crack down on critics has cost Malawi a 58 billion kwacha grant from United States of America.
But Lilongwe remains upbeat that Washington will reconsider its opposition.
“It’s unfortunate that they have suspended the grant basing on that. I don’t think that the people (Americans) who are here in Malawi are painting the correct picture about Malawi to Washington but let us wait and see,” said government spokesperson Patricia Kaliati.
The Americans, through the Millennium Challenge Corporation board chaired by Secretary of state Hillary Clinton in Washington on Saturday, resolved to suspend Malawi’s 350 million US dollar grant for the power sector - an equivalent of 58 billion kwacha.
A statement released by Washington says MCC will continue to monitor events in Malawi closely until June when the Board is expected to meet again to decide whether to terminate the compact or not.
The Board also expressed serious concerns about the economic and political situation in Malawi, and emphasized the need for the Mutharika administration to respect the rights of its citizens and civil society organizations.
“While the Government of Malawi had taken initial steps in the right direction after the violence of July 2011, more recent events -- including the arrests of opposition and human rights leaders and inflammatory rhetoric by senior government officials -- supported MCC’s finding of a pattern of actions inconsistent with good democratic governance,” reads the statement adding;
“The lack of progress on economic policy to bring the country’s IMF program back on track has contributed to significant deterioration of the economic environment and put at risk the viability of MCC’s planned compact investments. Malawi’s decision to allow Sudanese President Omar al-Bashir to attend a trade summit in Lilongwe, despite the International Criminal Court’s (ICC) outstanding warrant for his arrest, further deepened MCC’s concerns.”
MCC says the planned $350 million grant to be invested in the power sector was expected to improve the power sector by among other things, rehabilitating power plants and constructing new ones.
“The grant was expected to provide close to $2 billion in net income benefits to nearly six million Malawians, the great majority of whom live on less than $2 per day,” further reads the statement.
The Malawi, signed in April, was first put on hold immediately after last year’s July 20 mass protests in which police shot dead 20 people.
But while Malawi’s programme was suspended, a compact for Zambia worth about $355 million has been approved by the board which was chaired by US secretary of state Hillary Clinton. - Zodiak Online
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