Home News South Africa loans Malawi $35 mln to fight fuel shortage

South Africa loans Malawi $35 mln to fight fuel shortage

Published on 27/04/2012

South Africa agreed Friday to loan Malawi $35 million to ease crippling fuel shortages, in a show of confidence in the new government of President Joyce Banda.

The announcement in South Africa came during Banda’s first visit abroad since taking office two days after president Bingu wa Mutharika died following a heart attack on April 5.

“President Banda used the opportunity of her visit to brief President Zuma about the socio-economic challenges facing Malawi, paying particular focus on the fuel and forex reserves shortages,” said a joint statement issued following their talks.

“The South African government has agreed to extend a loan of $35 million to the government of Malawi to assist with the availability of fuel in Malawi,” it said.

Under Mutharika, donors cut hundreds of millions of dollars in aid to the impoverished nation, citing worries about an authoritarian bent to his rule.

That cut off a crucial supply of foreign currency, worsening Malawi’s economic troubles and making it difficult to import enough fuel to meet its needs.

Banda was a vocal critic of Mutharika, and has moved swiftly to restore ties with key donors, including former colonial power Britain.