Malawi's poor see benefits of debt cancellation

15 May 2009

Forty-year-old Limbikani Simbota, his wife Linile and their six children live in Kauma village, just on the outskirts of Malawi’s capital, Lilongwe. Limbani works as a security guard, earning MK5,000 (US$35) a month, while Linile is a housewife. With their meagre financial resources, life has been hard for the family, but access to public services, especially health, education and clean water, is a must for their survival.

Limbikani remembers how difficult it used to be to get medical care at the nearest health centre. After travelling 5 km to the understaffed clinic, he would spend hours queuing, only to be told in the end that there was no medicine available and that he would have to buy drugs from a private hospital or pharmacy instead. The long waits and lack of medicines at the clinic meant that, within Limbikani’s community, working hours were often wasted and sicknesses left untreated.

However, from 2006 Malawi began to receive help from the Heavily Indebted Poor Countries (HIPC) initiative, which releases countries from their foreign debts. Before then, Malawi was creaking under $3 billion of debt, with a quarter of the national budget going towards foreign debt repayment. Now, Malawi is able to spend more money on essentials like health, education and agriculture.

Linile confesses that she does not really know the meaning of external debt cancellation. However, she can see that the clinic is much better now than four years ago, as there are adequate amounts of medicine and enough medical personnel to attend to patients. In the past, most people opted to bypass the clinic and go straight to the referral hospital, about 8 km away. This created heavy congestion at the referral hospital, which often lacked medical supplies itself.

Limbikani offers another stark contrast between then and now. Patients are now given full treatment at the clinic – a change from the strict rationing that was usually the case in the past and that would often see incomplete doses given. The lack of availability of drugs also led to the emergence of a black market in which unqualified people retailed pharmaceuticals that were usually past their expiry date.

However, due to the changes implemented since 2006, when Linile, Limbikani or a member of their family falls ill, they now know that there’s a reliable, well-stocked place to go to.   


Facts and stats

  • In the 2007/08 financial year, Malawian government allocations to agriculture, health and education were MK 21 billion (a 25% increase from 2006/07), MK 28.9 billion (83% from 2006/07) and MK 24.6 billion (56% increase from 2006/07) respectively.
  • As a result of increased pro-poor allocations, institutional deliveries attended by skilled attendants increased from 38% (2004) to 45% (2007). Outpatient attendance also increased, to 1.17 per year in 2008 from 0.8 per person per year in 2004). This translates to an increase from 10 million to 16 million outpatients visits per year.
  • The annual budget support review highlighted numerous improvements in service delivery over 2008/9, including the rapid expansion of HIV and AIDS services, recruitment of more health workers, and more children staying in school to Standards 5 and 8.
  • DFID contributes to HIPC debt relief as part of its overall replenishment funding of the World Bank and the African Development Fund.

 

Photo of family outside house

Limbikani and Linile with three of their children

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