Bloomberg News

Malawi’s Budget Forecasts ‘Optimistic’ as Aid Falls, Donors Say

June 14, 2011

June 14 (Bloomberg) -- Malawi’s revenue forecasts may be too optimistic because of declining income from tobacco, rising fuel costs, foreign exchange shortages and a drop in aid, a group of foreign donors said.

The group, known as the Common Approach to Budget Support, recommended Malawi put in place contingency measures in case revenue falls short of the expected 307 billion kwacha for the fiscal year through June 2012, it said in an e-mailed statement today. Finance Minister Ken Kandodo on June 3 forecast revenue will meet recurrent spending even though aid is to decline after the U.K. reviewed relations with the country.

Some countries are holding back on giving aid to the southern African country until it completes the second review of its program with the International Monetary Fund.

To contact the reporter on this story: Frank Jomo in Blantyre at

To contact the editor responsible for this story: Gordon Bell at

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