Donors freeze US$400 mln aid to Malawi: finance minister


Malawi’s donors are withholding more than US$400 million in aid in protest at a law preventing gay marriages and another that lets the govnerment ban newspapers publishing material deemed bad for the public.

Finance Minister Ken Kandodo told Reuters on Wednesday the aid freeze would probably mean the government having to borrow more this financial year.
“This decision may impact on our domestic borrowing targets for the 2010/11 fiscal year as we could end up borrowing more than planned,” he said.

Malawi’s government is heavily dependent on foreign aid, with donor funding accounting for 40 percent of official receipts.