Minister of Finance Sosten Gwengwe has disclosed that discussions with the International Monetary Fund (IMF) on the new Extended Credit Facility (ECF) are ongoing and what has been put on hold is an IMF Mission which was supposed to start its work on Monday.
The Minister disclosed this yesterday in Lilongwe at a press briefing.
Gwengwe said the mission has not started and will not happen this week because there are some outstanding issue which need to be sorted.
According to Gwengwe most of the program structure and components have been agreed by the two parties but Malawi is yet to resolve the debt sustainability issue, which is a key requirements within the IMF program framework.
“The negotiations with IMF are still going on, what has been pushed forward is the mission that was meant to have started yesterday,
“The mission has not started because we have one outstanding issue which even if we did the mission, the mission would have been pointless because we would not have been able to go to the much required staff agreement. This is because within the fund they need to get approvals for the Mission Chief to come and sign that staff level agreement, that approval she has not gotten it yet and they are still pushing within the fund to make sure that we cross the line.
“The sticky issue is on the serviceability of our huge debts because IMF does not lend into a country with unsustainable debts and we need to be able to have that strategy plan on making sure that our debts are sustainable as it is,” said Gwengwe.
Gwengwe then assured Malawians that the negotiations with IMF are ongoing and that the ministry is expecting a conference call with the mission to update the ministry on the progress made within the fund.
“Both the IMF and us we working very hard to look at best ways on how to address this aspect and don’t be under impression that the IMF has left Malawi to find solution on their own, no that’s not true,” said Gwengwe.
Malawi is banking on IMF support as the country is facing a shortage of forex and fuel as well as a rise in prices of goods worsened by the recent devaluation of the Kwacha.
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