Lest we forget (2002) : Denmark halts aid to the Muluzi Administration blaming political intolerance and corruption

BBCNEWS

The European Union (EU) has asked the Malawi Government to
refund at least 8 million euros ($8m) that the government diverted from its intended use before 30 August.

EU head of delegation in
Malawi Wiepke van der Goot told the BBC on Wednesday that the EU was
demanding its money back because it was used for what he termed as
"ineligible expenditure".

The money was initially
meant for a road construction project in Blantyre but, according to a
joint EU/Malawi Government audit, the money was either used for other
unapproved projects or was misappropriated.

Malawi is in desperate financial plight and in the grip of a devastating drought which has swept across Southern Africa.

Several months ago Denmark halted aid to the impoverished nation blaming political intolerance and corruption.

And the International
Monetary Fund is withholding $47m of the $55m earmarked for Malawi due
to concerns about possible corruption and poor management.

Delay

Mr Van der Goot said the
EU recognised that Malawi was in dire
need of aid but if agreed measures were not respected, he said, "we
will be forced - against our wishes - to delay further budgetary
support to Malawi".

Finance Minister Friday Jumbe confirmed that the EU had asked for a refund but described it as "normal".

He told journalists the government was ready to refund the
money.

The EU has approved a
345 million euro package for Malawi to be spread over a period of
five-years, but the new money will not start flowing until after the
current problem is resolved.

According to EU food
advisor for Malawi Paul Ginies, the EU has already approved a 95,000
metric tonne donation of maize for Malawi where an estimated 3 million
people are facing starvation.

And some of the maize, according to Mr Ginies, has already started arriving.