Malawians can now hope for the better following the decision by the International Monetary Fund (IMF) to approve US$174 million (approximately MK195 billion) of financing to the Malawi Government.
A statement IMF issued on Thursday announced that this is a result of Malawi reaching a staff-level agreement on the second and last review of the Staff Monitored Program with Executive Board Involvement (PBM), meaning that Malawi will be under a new 48-month financing arrangement under the Extended Credit Facility (ECF).
The statement adds that the prospective ECF-supported program will aim at restoring macroeconomic stability, building a foundation for inclusive and sustainable growth, addressing weaknesses in governance and institutions, and strengthening resilience to climate-related shocks.
This follows a talk with IMF staff team talk and the State President Dr. Lazarus McCarthy Chakwera, Minister of Finance Sosten Gwengwe, Reserve Bank of Malawi Governor Wilson Banda and other senior government official.
Mika Saito, the IMF mission Chief who led discussions with Malawian authorities from August 29 to September 30, is cited in the statement as expressing the expectation that this arrangement will stimulate grant financing and bolster ongoing endeavors to reestablish a stable and sustainable macroeconomic position.
“The prospective ECF-supported programme will aim at restoring macroeconomic stability, building a foundation for inclusive and sustainable growth, addressing weaknesses in governance and institutions and strengthening resilience to climate-related shocks. Fiscal policy will aim at achieving a debt-stabilising primary balance in the medium-term through a package of expenditure adjustment and revenue mobilization measures. The authorities are committed to applying fiscal discipline, containing domestic borrowing, and improving public financial management,” said Saito.
The IMF delegation held discussions with President Lazarus Chakwera, Minister of Finance and Economic Affairs Sosten Gwengwe, Reserve Bank of Malawi Governor Wilson T. Banda, and various high-ranking government representatives.