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LILONGWE—Britain has made good on its threat and cut off general budget support for Malawi effective today, UK’s International Development Secretary Minister Andrew Mitchell has announced.

Mitchell said in a statement that he took the decision after the government of Malawi, which is heavily dependent on foreign aid, repeatedly failed to address UK concerns over economic management and governance.

“General budget support, which is used to allow government to deliver their own national strategies for poverty reduction against an agreed set of targets, has been suspended indefinitely,” said Mitchell.

“On governance, demonstrations have been suppressed, civil society organisations intimidated, and an Injunctions Bill passed that would make it easier for the government to place restrictions on opponents without legal challenge,” he added citing the controversial bill Mutharika just assented to in defiance of a court order.

UK did warn the Bingu wa Mutharika administration of “consequences” if its top envoy to the southern African country was expelled. Fergus Cochrane-Dyet, in a leaked cable to his superiors in London, had described Mutharika’s rule as autocratic. Malawi ignored the warning and booted the diplomat out of the country in April this year. Pres Mutharika later said he was offended by Cochrane-Dyet's remarks.

“On the economy, the UK is concerned that Malawi’s overvalued exchange rate has created chronic foreign exchange shortages which are having a serious impact on the Malawian private sector’s ability to drive future growth. There are now daily fuel queues, tobacco exports have deteriorated and Malawi is off-track with its IMF programme,” Mitchell said.

The statement said the development secretary’s decision is in line with international concern over Malawi’s current position. The World Bank, the European Union, the African Development Bank, Germany and Norway have all suspended or ended general budget support to Malawi.

"The UK provides development assistance in order to help communities lift themselves out of grinding poverty, whether that’s through getting children into school, ensuring women survive childbirth or helping farmers grow enough food to feed their families and communities.

"But poor people in Malawi and British taxpayers alike have been let down. In these circumstances I cannot justify the provision of general budget support for Malawi.

"In the meantime we will use other means to ensure that programmes to protect poor Malawians, amongst the poorest people in the world, and deliver basic services like health and education are able to continue.

"The UK has a long and deep commitment to the people of Malawi and we are keen to see the country resume the good progress it has made in recent years. I remain willing to reconsider our approach as and when our concerns are addressed."

The UK, which provides about half of Malawi’s development budget, has helped improve food security in Malawi for over seven million people a year by providing them with high yielding maize and legume seeds via the farm input subsidy programme.

UK support to strengthen the health service has, since 2004, helped save the lives of 3, 200 pregnant women and 40, 000 children. UK funding has built over 3, 200 primary school classrooms and 4, 800 toilets since 2001 which helped to keep more girls in school.

“All budget support is tightly monitored against a strict set of expected results and can be reviewed by the Independent Commission for Aid Impact at any time,” reads the statement.

This latest move comes as the UK government has reduced general budget support across the world by 43% and tightened up on the principles by which budget support agreements are made.

Lilongwe is yet to react to the decision by Britain.--maravipost

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