IMF declares Malawi on-track for Extended Credit Facility

International Monetary Fund (IMF) says Malawi is on-track to revive the Extended Credit Facility (ECF) programme with the fund which has been attributed to good management of domestic finance since September 2015.

Gondwe: Malawi on track for IMF programme

Gondwe: Malawi on track for IMF programme

Malawi President Peter Mutharika met with the Head of IMF, Oral Williams and his colleague at Kamuzu Palace

Malawi President Peter Mutharika met with the Head of IMF, Oral Williams and his colleague at Kamuzu Palace

ECF, approved in July 2012, is IMF’s main tool for medium-term financial support to low income member countries such as Malawi.

IMF Chief of Mission to Malawi Oral Williams says IMF appreciates the hard work that government put in to bring programme back on track.

Williams was speaking to the media after meeting government officials led by Minister of Finance Goodall Gondwe in Lilongwe on Wednesday.

“Regarding program performance, the authorities have demonstrated a concerted effort to put the program back on track. Program targets on net domestic financing and net domestic assets of the Reserve Bank of Malawi for end December 2015 were met,” said IMF.

However,  IMF noted that the buildup in net international reserves fell short of the end-December program floor owing to lower-than expected export revenues and some smoothing of the excessive volatility in the foreign exchange market.

“ On the structural side, reforms in the financial sector were carried out as planned. Improvements in public financial management (PFM), in particular bank reconciliations, are gaining momentum but this needs to be sustained,” said IMF.

In November last year the IMF noted that Malawi was in a “tight situation” to revive the off track ECF programme but pointed out that it was encouraged with measures government was implementing, including cutting the 2015/16 National Budget as recommended by the fund’s mission that certified ECF off track.

The latest IMF brief assessment on Malawi came on the back of another end-June 2015 review undertaken by the fund’s mission in September which prompted IMF to declare the ECF off track due to government’s failure to meet some key agreed programme targets mostly on net domestic financing and on the Public Finance Management Reforms.

Malawi’s headline inflation rate is one of the highest rates the country has registered in recent years as average prices for most goods and services are soaring unabated.

“ Rising food prices and a sharp depreciation of the kwacha contributed to annual inflation increasing to about 25 percent at end-December 2015. Inflation has since fallen slightly to 23.4 percent in February 2016 and non-food inflation has been on a clear declining trend, suggesting that the appropriate adjustments in monetary and fiscal policies are having their intended effects,” IMF noted.

IMF also said commitment to the flexible exchange rate regime and the automatic fuel pricing mechanism have helped Malawi to respond to external shocks.

“ The kwacha which depreciated by more than 35.6 percent from July 2015 to early March 2016—a trend mirroring that of neighboring countries—has begun to stabilize. This in part reflects efforts by the central bank to absorb excess liquidity from the banking system, greater fiscal discipline, and the advent of the tobacco season.”

The global lender said  it reached understandings to ensure that recent improvements in macroeconomic policy implementation in Malawi  are sustained.

“Restoring macroeconomic stability by bringing inflation—which has been stuck above 20 percent since mid-2012—down to single digits, remains the most important policy challenge in the near term. The revised fiscal framework recently approved by parliament is sufficient to meet the end-June 2016 program target on net domestic financing.

“Prudent fiscal policy, when combined with a tight monetary stance to maintain positive real interest rates, should place inflation on a downward path.”

IMF mission said it welcomed Malawi government’s efforts to strengthen commitment controls over spending, by requiring Ministries, Departments, and Agencies to provide detailed fiscal reports before receiving additional allocations.

The fund appealed to Malawi government to “exercise restraint “on the wage bill which now accounts for about 34 percent of revenues.

It also underscored the need to mobilize domestic revenues in line with Malawi’s sustainable development goals by broadening the tax base and strengthening tax compliance.

“Based on progress to date, it is anticipated that a request to complete the seventh and eighth reviews under the ECF-supported program could be submitted for consideration by the IMF’s Executive Board in May 2016.”

IMF mission met with President Arthur Peter Mutharika, Minister of Finance Goodall Gondwe, Governor of the Reserve Bank of Malawi (RBM) Charles Chuka, other senior government and RBM officials, a broad range of national stakeholders outside government, as well as representatives of Malawi’s development partners.

Meanwhile, IMF has promised to assist the government in formulating the 2016/17 budget so that domestic borrowing remains in check. –Additional reporting by Thom Chiumia, Nyasa Times

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27 thoughts on “IMF declares Malawi on-track for Extended Credit Facility”

  1. roy hauya says:

    there is nothing exciting about IMF linking up with malawi on credit facilties; its credit, get that first, so its about enslaving malawians

    second i would never ever be excited about loans which bind posterity while at the same time there is NO guarantee of good use of the resources.

    i would rather prepare my people for pain, hard work and freedom from global manipualtion than go on to commit the spociety while only the elite benefit. this is as immoral as it is criminal

  2. Vyantonda says:

    akuteta come out on 577 fullstop

  3. Nelson Chipungu says:

    Well done Mbendera!!!!
    You say it like it should be said. There is no point in IMF or any donor wasting money on people who does not work. It is not against the poor to plead that lazy and corrupt politicians civil servants and judges by punished. It is in the interest of the poor and the whole of Malawi that donors and IMF get’s value for its buck because that value would trickle down to the very poor who is so much in need of it.
    The elite can all wear fancy and very expensive suits and talk all kinds of nonsense in the most eloquent way possible – even addressing one another as ‘honourable’ and ‘my lord’ – but when it comes to the delivery of services they are simply are not up to standard, that is if they are at the office at all. On a practical level, we no longer have cabinet ministers, senior civil servants and judges maintaining regular office hours. This can simply be verified by visiting any government office and or high court at 8am or 4pm on any work day.
    I therefore call upon IMF and all donors to make no funds available until such time as all the bad apples have been removed even if that means that we have to subcontract the whole of government as that would in all likelihood be a cheaper option than to finance the current fools we have to face on a daily basis knowing so well that we can in reality expect nothing from them as they simply have been doing nothing and will continue to do nothing unless they get hurt at the only place where it matters namely their pockets.
    I would also like to urge IMF to add a further precondition for resuming aid that none of the aforementioned parties receive any salary adjustment until such time as the issue of performance or termed as ‘delivery’ by the Catholic Bishops have been resolved. The simple reason for requesting such a precondition is that once the affected parties knows what is coming we may face some form of improvement failing which they would face the boot and unceremoniously so.
    I would also like to urge IMF to investigate which retirees have neglected or failed to live up to international performance criteria during their tenure in office – whether they be presidents, holders of public office in government or parastatals or judges – as no person should be allowed to receive any form of pension after retirement where he or she had failed to live up to the necessary criteria whilst on the job.
    People’s lives were ruined by the lazy and corrupt officials and many have lost loved ones because of bad or not government and therefore they deserved to by punished.

  4. Joseph Phiri says:

    Well done Mbendera!!!!
    You say it like it should be said. There is no point in IMF or any donor wasting money on people who does not work. It is not against the poor to plead that lazy and corrupt politicians civil servants and judges by punished. It is in the interest of the poor and the whole of Malawi that donors and IMF get’s value for its buck because that value would trickle down to the very poor who is so much in need of it.
    The elite can all wear fancy and very expensive suits and talk all kinds of nonsense in the most eloquent way possible – even addressing one another as ‘honourable’ and ‘my lord’ – but when it comes to the delivery of services they are simply are not up to standard, that is if they are at the office at all. On a practical level, we no longer have cabinet ministers, senior civil servants and judges maintaining regular office hours. This can simply be verified by visiting any government office and or high court at 8am or 4pm on any work day.
    I therefore call upon IMF to make no funds available until such time as all the bad apples have been removed even if that means that we have to subcontract the whole of government as that would in all likelihood be a cheaper option than to finance the current fools we have to face on a daily basis knowing so well that we can in reality expect nothing from them as they simply have been doing nothing and will continue to do nothing unless they get hurt at the only place where it matters namely their pockets.
    I would also like to urge IMF to add a further precondition for resuming aid that none of the aforementioned parties receive any salary adjustment until such time as the issue of performance or termed as ‘delivery’ by the Catholic Bishops have been resolved. The simple reason for requesting such a precondition is that once the affected parties knows what is coming we may face some form of improvement failing which they would face the boot and unceremoniously so.
    I would also like to urge IMF to investigate which retirees have neglected or failed to live up to international performance criteria during their tenure in office – whether they be presidents, holders of public office in government or parastatals or judges – as no person should be allowed to receive any form of pension after retirement where he or she had failed to live up to the necessary criteria whilst on the job.
    People’s lives were ruined by the lazy and corrupt officials and many have lost loved ones because of bad or not government and therefore they deserved to by punished.

  5. dadi says:

    bravo!!!!!

  6. NGONGOLE SIZINTHU says:

    Ngongole zonyadira kodi? aaah aah munakhala bwanji amalawi

  7. Mugonapamhanya says:

    Peter may not be the best president but the only reason he will win in 2019 is because there is no alternative. No alternative at all.

  8. Read “10 Selfies Gone Horribly Wrong”. Koma ndiye wakhanyulatu mwanankazi. Kwayasamiraatu. Henga valley woyeeeee!

  9. paul says:

    We have got the loan but why are prices of goods still high we need salary increases for civil servants the kwacha was trading at 450 and now it is at 700, that is 55% depreciation while salaries are intact, government should consider increase salaries or appreciate the kwacha back to 450 if they wantto give us same salaries, we cannot make ends mett

  10. Iwe David Mbendera, you belong to the party of death and darkness. You are an idiot and also a criminal. I challenge you APM is the next president in 2019. Take my word!

  11. Prof. Odilii Ayedemi says:

    David Mbendera you are a wizard, imfiti, takati and satanist. What is wrong with you? Instead of appreciating what the government has done you start to behave as Mtambo and Trapence the stooges and traitors of our nation. Thanks abambo Tembo anabona ndiposo ndi a Doctora, crocodiles would have feasted on you.
    Govt is on track get the message straight. Mbuzi and kambwe iwe.

  12. For the matter of fact, Malawi does not need Ngongole (Loan) from IMF. The money that they give to countries is not free or a grant. It is a loan which will in turn have negative impact on tax payers.

    IMF, go to hell with your loan, Malawians like me do not need it. All what we want is a grant and not a loan.

  13. Green grass says:

    Welcome development but has come at the expense of huge budget cuts to Ministries and Departments who have in the process incurred huge debts and social services on the verge of collapse. I guess one compelling factor is the huge food deficits the country is likely to face this year and the need for food imports and hence the need for forex.

  14. therere says:

    this is good news for the country, let us monitor our expenditure so that we should not be off track again

  15. Benjones says:

    ALL complain has gone to deaf ears. IMF can not pretend that are well aware of the situation Malawi is in. I smell something here I hope IMF is not involved in a deal with Peter (IMF GATE).

  16. chinkombaleza gumanyundo gowa says:

    Bwana Mbendera give credit where it is due. Congrants MG and the responsible officers in this department.

    Goodall and APM should be as happy as I am.

  17. Tonde says:

    Bwana Mbendera,

    zikuwoneka ngati munadwalapo matenda a misala. Ndipo ngati simunadwalepo, mudzadwala nthawi ina iliyonse.

    Inu okhala m’Malawi, mungalephere kufunira dziko lanu zabwino ?

  18. chinkombaleza gumanyundo gowa says:

    D.M this has undergone thorough monitoring and evaluation. Its not out of blues. Mind you not all people managing various departments are corrupt. Give credit where it is due. Congrants MG For improvement

  19. Tonde says:

    Mbuzi says,

    A David Mbendera,

    Zikuwoneka ngati munadwala matenda a misala. Koma ngati simunadwalepo, muzadwala nthawi ina iliyonse.

    Inu okhala m’Malawi, mungalephere kufunira dziko lanu zabwino ?

  20. Lottie says:

    Bwana Mendera, you are very unpatriotic to your own country. The country is beyond the politicians. The large masses of people need basic necessities and the country still needs outside help. For you to say what you have said, it is very unfortunate.

  21. mbewe says:

    Mr Mbendela i think you are not a Malawian of goodwill. All the problems we are facing you are still happy to in this situation. Do you know who is at pains? The way you have commented shows that you’re a man who knows well. But what is lacking is you undrstanding who solve the problems in the absence of machinery. You are well educated i presume and in the know. Am sure by the end of the month you get full package that makes you manage to travel in villages and see how difficult life is in the community.
    Today you’re not happy donor’s should resume AID so that the lives of the people you are speaking for should enjoy life.
    I thought yoy could better suggest how best Malawians should conduct themselves so that the AID should be handled well other tgan continueosly demonizing the country. What are going to benefit from this? Let’s be patriotic to our country. We should accept we have problems in the country its time now to join hands and find the solutions. Nobody will solve our problems without ourselves accepting our problems. We are always in denial state that its not our problem but their problems. WHOSE?

  22. nambewe says:

    well done Mutharika now make sure that legislation Malawi are strict enough to avoid cashgate!

    Be tough! nobody too big to jail! systems need sprucing up!

  23. dee Walker says:

    mukunamiza ndani? IMF sakunena chili chonse akungoona mbabva mwati munamize a Malawi poti sawerenga?

  24. dzambo says:

    should IMF really be doing that? Where are we the owners of this country? Where is the executive that should actually be doing that? If IMF were to do what you are recommending then that would be micromanagement at its best, which is itself not part of their mandate. Internal administrative workings of governments are best left to the governments themselves. If we think our politicians are not the type to walk the talk, then we have ourselves as Malawians to blame for putting wrong people in government!

  25. David Mbendera says:

    Please IMF, PLEASE do not give any money to our corrupt politicians and totally collapsed civil service and judiciary. The simple point is that none of these people are working and whatever money you will be giving will end up in the pockets of these lazy and corrupt bastards.
    What is needed is performance management in accordance with not Malawian but International Standards seeing that our President and his party wants a luxury jet, our legislators wants to boycott the work of parliament unless their demand – daily allowances are met and our judges wants salaries which is on par with our first world countries, in addition to which they demand other benefits which is not only obscene in the extreme but unheard of in other parts of the world, failing which they would “withhold labour” which is nothing less than blackmail couched in nice and polite terms, also unheard of elsewhere in the world.
    We desperately need performance agreements being entered into by the IMF and all sectors, roll players and employees within in all spheres of government before there can be any talk and even less so any form of financial aid being forthcoming as virtually only the aforementioned parties ends of being the true beneficiaries of such aid and the populace is effectively left to out of the equation.
    IMF needs to carry out a performance audit to establish which parties in government has not lived up to international performance criteria which is nowadays very much measurable with various practical measurement tools being available on the internet. Should it be found that the president, a cabinet minister, a member of parliament or a judge has not been performing – whether it relates to attending to his or her duties or the delivery of services – then such person or persons should immediately be removed from office as an absolute not negotiable precondition before any aid can resume. We have to face up to the fact that we have failed miserably in terms of service delivery as was alluded to by the Catholic Bishops and until such time as the issue of delivery has been addressed no amount of aid would remedy the cataclysmic situation we are in.

    1. Glen James says:

      If you really hate your own country to that core, why can’t you just change citizenship? Consider doing that please! No wonder your country is the most poorest one on earth cause of jealous and unpatriotic people like you. Please you can choose any of the European countries. We will welcome you here. You (Africans) are indeed half humans.

    2. sd says:

      shame on u educated fool Mbendera..just leave Malawi&go to hell !..ass hole

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