The National Advocate Platform (NAP) has hailed President Dr. Lazarus McCarthy Chakwera and his administration for restoring donor confidence that has culminated into the approval of the Extended Credit Facility (ECF) by the International Monetary Fund (IMF).
The coalition has also commended Chakwera for devising stringent measures to mitigate the impact of the devaluation of the Malawi kwacha against major foreign currencies, particularly the United States dollar.
NAP is a civil society grand coalition comprising CSO networks, human rights defenders, youth movements and individual citizens established in 2013 in Malawi.
In a statement issued alongside a panel discussion the coalition held on Friday to react to devaluation of the local currency and the measures Chakwera announced on Wednesday to cushion vulnerable citizens, NAP Chairperson Benedicto Kondowe acknowledged both the President’s and the Minister of Finance’s comprehensive approach in addressing the challenges posed by the 44 percent devaluation.
Kondowe said the outlined measures by the President and the Minister of Finance demonstrate a concerted effort to not only stabilize the economy, but also to protect vulnerable sectors from the shocks of the exchange rate alignment.
“NAP also acknowledges the IMF’s approval of Malawi’s ECF program, amounting to US$175 million with immediate disbursement of US$35 million and the resumption of the budget support. The ECF approval is a positive step, indicating a commitment to economic recovery and unlocking forex demand,” he said.
Kondowe encouraged the government to utilize the ECF ‘strategically’ as a catalyst for domestic wealth creation, observing that the facility cannot solve the complex economic challenges the country is facing.
Turning to donor commitment to directly support Malawi’s budget, the NAP chairperson described the development as a ‘historic commitment after 10 years of negotiations’, hoping that it will increase fiscal space thereby better supporting access to public goods and services during the current tough economic situation.
Kondowe further hailed Chakwera for undertaking to reduce foreign and domestic travel, fringe benefits and strict approval modalities for training and education opportunities outside Malawi. He said this will help to save forex.
“The implementation of various interventions such as the Cyclone Recovery Program, Urban Emergency Cash Transfer, increase Social Cash Transfer Benefit Levels, and coverage expansion, as well as suspension of the adjusted water tariffs, all contribute to cushioning the vulnerable households against the adverse effects of the exchange rate alignment. On the other hand, initiatives like recruiting health workers, discussions on skilled labour export, and reviewing minimum wages show a commitment to human capital development, addressing the social impacts of devaluation,” he said.