Africa-Press – Malawi. The International Monetary Fund (IMF) has committed to meeting its end of the bargain in implementing the four-year – $178 million – Extended Credit Facility (ECF) programme with Malawi amid challenges.
The Bretton Woods institution is, however, worried over slow progress in implementing the necessary policy actions on a roadmap to complete programme review.
In a response to a written questionnaire on Wednesday, IMF Resident Representative Nelnan Koumtingue said Malawi’s ECF programme is focused on bringing back economic stability and fostering sustainable growth.
“However, progress has been slower than expected due to some policy setbacks and delays in implementing the planned reforms, especially given the challenges of high food prices and fuel shortages,” he said.
Koumtingue said ongoing discussions are about finding ways to achieve a balanced budget, strengthen foreign reserves and ensure that the country’s debt is manageable.
Koumtingue said the arrangement is Malawi’s programme and that ECF arrangements will automatically terminate before scheduled terms if no programme review has been completed over an 18-month period.
He said ECF arrangements may also be cancelled by the authorities at any time, which may be appropriate, for instance, when the underlying macroeconomic imbalances have been resolved.
“According to the proposed schedule of disbursement for the 2023-27 ECF, the second tranche of the ECF was available on July 20 2024. A necessary condition for its disbursement is the observance of performance criteria for March 31 2024, and completion of first review,” Koumtingue added.
In a recent interview, Secretary to the Treasury Betchani Tchereni said that Malawi has been able to meet its commitments under the programme, despite facing some challenges in implementation.
Tchereni emphasised that Malawians should understand that the ECF programme is fundamentally about economic management rather than just securing funding tranches from the IMF.
On November 15 2023, the Board of Executive Directors of the International Monetary Fund (IMF) approved a $175 million four-year Extended Credit Facility (ECF) programme for Malawi.
The ECF arrangement aimed at supporting the authorities’ commitment to restore macroeconomic stability, build a foundation for inclusive and sustainable growth, including strengthening resilience to climate-related shocks, and address weaknesses in governance and institutions.
The arrangement was also expected to catalyse grant financing and capital inflows including foreign direct investment and trade credit.
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