Donors have suspended more than $400 million in aid to Malawi over a law that prevents gay marriages and another that gives the government a hand in preventing newspapers from publishing material considered bad for the public.
The suspension may prompt Malawi to borrow more money this year, Finance Minister Ken Kandodo told Reuters.
“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.
The suspension comes after the German government last month withheld its budget support for Malawi due to concerns over new laws that penalize homosexuality between women and allow the government to expand its control over the media. The Millennium Challenge Corp. also deferred the signing of a USD350.7 million compact with the African nation last month over new laws that undermine human rights.
>> Germany Halts Budget Support for Malawi
>> MCC Holds Off Malawi Compact
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