Former Malawi Finance Minister Joseph Mwanamvekha has revealed that the Tonse Alliance administration led by President Lazarus Chakwera canceled a $101 million (101 billion Kwacha) deal with International Monetary Fund (IMF) because it was negotiated by former President Peter Mutharika.
Mwanamvekha who served as Finance Minister from July 2019 to May 2020 under the Mutharika administration released a statement yesterday aimed at refuting claims by the Tonse administration that Malawi is facing a forex crisis today because of the Democratic Progressive Party.
Mwanamvekha said in his statement that one of the causes of the forex crisis is the cancellation of the Extended Credit Facility (ECF) by the Chakwera-led administration which saw Malawi lose US$101 million.
“Cancellation of IMF’s Extended Credit Facility by Tonse Administration which led Malawi to lose $101 million which was already negotiated by the DPP led government. One would have expected that the Tonse government would have continued with the programme while negotiating a new facility to allow a seamless transition into a new programme. Malawians would want to know that this programme as the end of our tenure the programme was on track as observed.” said Mwanamvekha.
He added that, in its efforts to get forex, the Tonse Government sent a team to Egypt to meet the Afri-exim Bank and in Kenya to meet TDB (Trade and Development Bank) to negotiate foreign exchange facilities but both did not succeed.
“Now, they have resorted to travel to Badea-Saudi Arabia for the same. We know that should they fail to negotiate in Saudi Arabia they will again, as usual blame the DPP as a cause of their failure,” Mwanamvekha said.
Following the cancellation of the ECF, Malawi has been struggling to secure another extended credit facility programme as IMF is now worried about the country’s debt levels and its ability to repay debt.
International Monetary Fund (IMF) managing director Kristalina Georgieva said in an interview last week that debt unsustainability makes the IMF’s entry into Malawi more difficult.
Following remarks by IMF Country Manager for Malawi that the discussions on new ECF had been put on hold, Minister of Finance Sosten Gwengwe held a pressing where he insisted that Malawi and IMF were still discussing but what had been put on hold is an IMF mission to Malawi.
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