Malawi has re-engaged the International Monetary Fund (IMF) for a possible resumption of the Extended Credit Facility (ECF) programme, a year after the previous programme fell off.
An IMF mission is expected in the country early next month to commence talks with local authorities on the ECF, both the fund’s resident representative Nelnan Koumtingue and Minister of Finance Joseph Mwanamvekha, confirmed.
Koumtingue said the staff mission is planned for June 9 to June 18 ‘to initiate discussions about an ECF supported programme.’
Focus would be on macroeconomic stability, fiscal policy, and structural reforms—the standard conditions that come with IMF concessional lending to low-income countries.
Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said the talks will center on restoring economic stability.
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“The discussions will focus on macroeconomic stability policies. There are no plans for devaluation,” Mwanamvekha said.
In an interview, Economics Association of Malawi president Bertha Chikadza said the engagement will help unlock external financial support and improve policy credibility if an agreement is eventually reached.
She said this could support forex inflows and strengthen fiscal and monetary discipline.
“However, IMF-supported programmes come with strict reform conditions aimed at improving public finance management.
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“The success of the engagement will depend not only on reaching an agreement, but also on government’s commitment to implementing the agreed reforms in a credible and consistent manner,” Chikadza said.
Economist Marvin Banda urged the government to use the negotiations as basis for fiscal discipline.
In May 2025, the government announced to have mutually agreed with the fund to terminate the four year $175 million programme, consequently forfeiting about $140 million.
An ECF programme is an IMF’s main tool for medium-term financial support to low-income countries.
It brings about financial assistance to countries, like Malawi, with a volatile balance of payments (BoP) position—a record of all transactions by a country and the rest of the world. It helps mitigate foreign exchange scarcity on the market.
The arrangement is also touted for its “signaling effect” of triggering direct budget support and restoring dornor-confidence.