International Monetary Fund (IMF) on Monday approved a K81.5 billion (US$112.3 Million) loan facility for Malawi which will be disbursed over three years.
The Executive Board of the International Monetary Fund approved the new three-year arrangement for Malawi under the Extended Credit Facility (ECF) to support the country’s economic and financial reforms.
According to a statement from the IMF, the approval means that US$16 million can be immediately given to Malawi while the remaining amount will be phased over the duration of the program subject to semi-annual reviews.
Following the Executive Board discussion on Malawi, Deputy Managing Director Tao Zhang hailed the country for achieving macroeconomic stabilization with a rebound in growth and inflation reduced to single digits despite experiencing two years of drought.
He however noted that the public debt to GDP ratio has risen.
“Authorities are making efforts to entrench macroeconomic stability, raise growth and reduce poverty. Fiscal consolidation will ensure long-term debt and external sustainability.
“The IMF arrangement under the Extended Credit Facility will support the authorities’ program and efforts,” said Zhang.
He added that progress will depend on Malawi government’s strong ownership to support successful implementation of their program.
Minister of Finance Goodall Gondwe told the local media that the approval is a boost to donor confidence and government hopes it will open more doors.