Economist Henry Kachaje has claimed that the International Monetary Fund’s (IMF) approval of a new credit facility for Malawi is a sign that the country’s economy is yet to recover.
On Monday, International Monetary Fund (IMF) approved a K81.5 billion (US$112.3 Million) three year loan facility for Malawi.
Reacting to the news, Kachaje wrote on Facebook on Tuesday that the loan will be given to Malawi because of the country’s failure to make more money from what it exports.
“The Extended Credit Facility (ECF) is a loan that the IMF gives to help out economically struggling economies. It has never been a reward for good economic performance of a country. But it is a good program that is meant to help struggling economies to recover.
“If however, you keep getting this ‘medication’ over and over again, it means you are not yet recovering well enough to be ‘discharged’,” said Kachaje.
He added that when the IMF is convinced that a country’s economy has recovered, the organisation stops providing that country with the ECF and moves it to another program which is more on economic advisory.
According to IMF, the loan will be given to Malawi to support the country’s economic and financial reforms
US$16 million will be disbursed immediately while the remaining amount will be phased over the duration of the program subject to semi-annual reviews.