Goodall upbeat Malawi to get IMF credit February 2016, donors to open aid taps

Finance minister Goodall Gondwe has cast a shadow of hope that the government will be on track with the International Monetary Fund (IMF) extended credit facility in February 2016, a move that will trigger the coming back of Malawi’s traditional donors.

Goodall Gondwe and RBM governor Chuka: No borrowing

Goodall Gondwe and RBM governor Chuka: No borrowing

Prof Ben Kalua:

Prof Ben Kalua: I havedoubts

Speaking during a round table discussion on Monday in the capital Lilongwe organised by the Reserve Bank of Malawi to commemorate 50 years of its existence, Gondwe said the government has cut down on borrowing drastically to tame inflation, one of the conditions imposed by the global lender.

“We are spending less, therefore we are borrowing less. The figures show we are doing extremely well. Infact we have not borrowed in November,” said Gondwe trying to give hope to Malawians who are frustrated and live in despair in the current economic turmoil that has pushed the cost of living drastically up.

Inflation is hovering at around 25 per cent, the highest in the region, which means the cost of food and basic things in Malawi is very expensive compared to other countries in Sadc.

But Gondwe said the IMF team, which is coming next week to see how the government has performed, will recommend that the extended credit facility resumes.

He said the government is making sure that the economic policies are in tandem with monetary policies hence the drastic cutting down on borrowing by the Reserve Bank of Malawi from commercial banks and other entities to tame the inflation.

But Chancellor College professor of economics Ben Kalua expressed strong reservations that the Government will be on track with the IMF extended credit facility.

Kalua said the government has excessively borrowed from financial markets and has even issued bonds, long term borrowing which can take up to two years of repayment period.

“Economic fundamentals show that we are not doing well. I doubt if we will have the IMF extended facility in February,” he said.

He said the excessive borrowing is negatively impacting on the economy because it is more than what the Malawi Revenue Authority can collect.

President Peter Mutharika has flown in ordinary plane on his three nation tour as opposed to the usual chartering of presidential jet, as a means of cutting down on expenses.

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Rahul
Guest
How can the minister even bring the words borrowing and doing well in the same speech, this is absurd. For sometime now we havent been doing okay, and the fact that our Minister sees Aid as the only solutions to our problems ,this is even the worst problem that we have. MRA Collections, Road Traffic Collections, MERA, Escom and these other government offices, Each month they collect soo much money that if the outlet of these moneys was perfectly planned, Malawi shudnt have been the poorest country in this world. Effective Plan, Plan, Strategy, Our main plain doesnt hav to… Read more »
Judah
Guest

Bodza he said the same in July cheating us that donors will be back by October. unfold the 577 first

Ndata
Guest

Professor Kalua what you are saying is too deep for these cats to understand

Mpumulo wa Bata wayandikila
Guest
Mpumulo wa Bata wayandikila

The right is not talking to the left, Mathanyula says one thing his Finance Minister says another, total chaos!!!

chindime
Guest

The president said donors are not coming back, so who is right?

Uncle Master
Guest

Let us be proud of our country if something positive is being emanating.

Balamanthu
Guest

When a government cannot reconcile its Bank accounts for the last three years, has no audited financial statements for the last five years, how can the IMF come and bring aid back.These are basic things which Gondwe and his Accountant General are failing to sort out because government does not have the political will to resolve these issues.We should just brace for hard times ahead.Dont give us false hopes.My house stopped buying bread some one year ago because it has become quite expensive.Kubera mavoti kumabweretsa mabvuto achoncho.

SONG
Guest

This is Gondwe I know full of lies to Malawians. Ministry of Finance needs capable like Mathews Chikaonda, Luise Chimango, John Tembo not Gondwe who tells lies every day and killing Malawians.

akuntinji anamuona
Guest

No doubt professor kalua. It takes practical side of handling the vehicle not theoretical side of it. Please see beyond books assumption and live reality of Malawi economy.

For sure we will be riding IMF track.

mtumbuka1
Guest

Who will be paying back the credit Mr gondwe, the already heavily taxed poor Malawians? It’s a pity that you will be doing the borrowing and use the money to buy fancy cars for peter and his friends including yourself but the poor Malawians will be paying back the loans for you. You are very lucky Mr Goodall and your president.

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