IMF approves K19.5 billion for Malawi

Jun 22, 2017 Politics 51
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Malawi Parliament

The International Monetary Fund (IMF) has completed its ninth review under Malawi’s Extended Credit Facility (ECF), allowing the country to receive US$26.9 Million (K19.5 billion).

The approval of the funds means Malawi has received a total of US$191.4 million under the arrangement.   US$143.5 million of the money is for the ECF as approved in 2012 while US$47.8 million was given last year for Malawi to deal with the impact of a drought that was induced by the El-Nino weather pattern.

The disbursement aims at stabilising macro economy, spurring economic growth and reducing poverty levels in Malawi.

According to IMF, Malawi’s Real Gross Domestic Product (GDP) is to go up with good harvest from the past farming season as the economy is being driven by agriculture. Annual inflation is also expected to remain on a downward trend.

However, the lending institution notes that macroeconomic outlook remains challenging, reflecting uncertainties related to adverse weather conditions and policy slippages.

Following the Executive Board’s discussion, IMF Deputy Managing Director Mitsuhiro Furusawa, asked Malawi to reduce inflation by combining tight monetary and fiscal policies. He also advised that expenditures should be limited to available resources.

“Strengthening public financial management, including through strong commitment controls, routine bank reconciliations, and regular fiscal reporting, remains critical to preventing the misappropriation of public funds and rebuilding trust and confidence in the budget process.

Mitsuhiro Furusawa
Mitsuhiro Furusawa says Malawi is taking proper steps to safeguard and strengthen financial sector.

“Implementation of prudent fiscal policy is important to safeguard medium-term fiscal and debt sustainability. Improved revenue mobilization and expenditure efficiency will reduce aid dependency and create fiscal space for social spending in pursuit of Malawi’s sustainable development goals,” said Furusawa.

The IMF Deputy Managing Director noted that Malawi has already taken important steps to safeguard and strengthen financial sector stability, given the negative impact of weather-related shocks and the prevalence of credit concentration risks.

He however encouraged Malawi to closely monitor banks’ compliance with prudential norms and facilitate rationalization of the banking sector.

“Strengthening creditor rights and reducing lengthy judicial processes in recovering collateral will contribute to a reduction in non-performing loans,” he said.

Malawi relies on agriculture for economic growth, but the effects of climate change in 2015 and 2016 witnessed the country’s economy performance worsening.

The effects of climate change led the country to be food insecure, as many households were reported to have realised enough harvest for their survival.

The development saw government pleading for help to help the starving population in Malawi due to hunger.

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51 Comments

  2. ALL THAT NOISE BECAUSE OF A LOAN OF 19billion.even the so called economists clapping hands shame.soon after tobacco sales,u say economy doing fine!Malawian degrees shame.

  3. Wothandiza akuthandiza nanga ndalamazo zimagwira ntchito yanji,aziphunzitsi ndiawa mukuwasweretsa mmakonde mwawo ngati abuluzi,mdziko ndalama sikuwoneka zoti ndinthawi yasizoni wosadziwika nkumati bola nthawi yamvula,koma agalu inu mukapysa muona ndimbuyanuyo Peter. Ndine Soldier Waanthu Wosauka sindikuopa

  5. A MALAWI TIZIVOMEREZA KUTI SITINGAYENDETSE DZIKO OPANDA KUDALIRA OTHANDIZA NDIFE OSAUKA CHOFUNIKA TIGWIRITSE NGONGOLEYO MOYENELERA KUTI MTUNDU WA A MALAWI MWINA UNGAKUKHULUPILIRENI

  10. reality check,malawi national budget is K1.3 trillion and some quarters are making noise over a loan of K19 billion.we cashgat K570billion,K22 billion,K1,7 billion and all the other billions being chapondered now,i think this tiny amount can be easily raised locally by eradicating chapondering.

  11. I agree with what Professor Ben Kaluwa stated (radio) that unreasonable wage demands and the effecting of the same will only accelerate inflation in the country. He said this when commenting on the Civil Servants proposed salary/wage increase. Of course I am aware that MPs started the demand but have cooled off after learning of the civil servants demand and am sure as soon as the issue of civil servants is sorted out they will resume their demands for a hike in their own package. This could make the country lose track of IMF and World Bank requirements. And this could make our country to be sliding deeper into poverty as we demand more pay which may not be accompanied by an improvement in our GNP.

  16. Kodi inu monga dziko munayamba mwakhala pansi nkudzifunsa nokha kuti mabillion omwe boma lakhala likubwerekawa adzabweza liti kuti tidzakhale ozidalira pachuma? Apa sindikuonapo tsogolo ayi. Dziko lanji longokhalira kukatenga katapira? Nfipo mapeto ake atsogoleri abe ndalamazo. Dzikoizingokhalira kubweza ngongole basi

  17. Reality check,its business as usual,these monentary organisations gets twice the amount approved from us.Unless we wake up on our policies otherwise the donor community wont take us out of poverty.

  19. G KASAKULA OF TIMES GROUP says Malawi Economy under siege! IFM is saying APM’s Economic Policies on track. My querry is “who knows better about the economy of a Country”????

    1. imf is a non partisan international organisation while the person you have just mentioned is affiliated to a certain political party in opposition, so you can draw a conclusion yourself

    3. Kasakula is right. Our economy is indeed under siege. If the economy is on track why are we keeping on borrowing. How are we going to repay, bcoz there are no any contingent plans of uplifting the agricultural sector which is our main source of income.

  24. But don’t ever dream the money is gonna answer Malawi nationals at all, this govt won’t deliver they’ ll just feast on it. Mix used oil and sand for roads as a way to syphon money and share…fools will ululates development whilst hugge sum’s gone.why k19.7b when that k9.5b after msb sale is hidden.?

  26. koma yaaa!!!! nyasaland sizatheka mesa mdala uja amaima pachulu nkumat ife sitimadandaula,kopanda donors timatha kupanga budget huuuuuu matama afinyeeee…

  27. koma yaaa!!!! nyasaland sizatheka mesa mdala uja amaima pachulu nkumat ife sitimadandaula,kopanda donors timatha kupanga budget huuuuuu matama afinyeeee…

  32. If they refused bwenzi ma comments Ali kale 5999999 enjoying it… we have bigger problems in Malawi more than we could imagine kkkkkkkkkk

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