Mutharika ‘delighted’ with IMF’s aid resumption: Analysts caution Malawi govt

President Peter Mutharika has said he is humbled with International Monetary Fund (IMF} resumption of aid to Malawi.

President Mutharika and Finance Minister Goodall Gondwe: IMF resume aid to the poorest country in the world

President Mutharika and Finance Minister Goodall Gondwe: IMF resume aid to the poorest country in the world

The IMF board on Monday nodded to an immediate disbursement of US$18.1 million (K8 billion) in balance of payment support to the country.

Mutharika said he is “delighted” to note that at the conclusion of the discussionMitsuhiro Furusawa, Acting Chair and Deputy Managing Director, observed that the DPP-led government is showing commitment to rebuilding trust in public institutions.

“I must say that my administration will continue to improve the available regulatory frameworks which are key to safeguarding financial sector stability,” he stated.

Mutharika asked Malawians to join hands to seal all the loopholes and tighten the financial management systems.

Minister of Finance Goodall Gondwe has also  said IIMF resumption of aid to Malawi was pleasing but said government will not rest on their laurels as they need to continue putting in place structures that will ensure good financial management.

Gondwe said IMF decision shows that the country has passed the test on its ability to manage its affairs.

“Of course they have given us criteria which we need to follow as well which we will make sure we do,” said Gondwe, citing the limit on borrowing from the banking sector and the improvement in the relationship between the Reserve Bank and the Accountant General to detect the reoccurrence Cashgate.

The Finance Minister, however, said as quoted by The Nation that the development does not mean it will automatically trigger a reaction from bilateral donors to reopen their budgetary support to Malawi.

“Budgetary support will not be resumed in the wake of this development because bilateral donors have since changed their policy in the way they will be providing their support,” Gondwe said.

He, however, said Malawi expects to receive budgetary support from the World Bank, the European Union and the African Development Bank in the 2015/2016 financial year.

“Infact the ADB are expected to start as early as June. But I don’t want to be euphoric. We need to continue to work hard and well in terms of how we are managing things. This includes putting in place structures that will ensure good financial management,” said Gondwe.

Meanwhile, analysts have asked the government to tread with caution and not to relax on fiscal and monetary policies as the economy remains fragile, Daily Times reported on Wednesday.

University of Malawi economics professor Ben Kalua who is based at Chancellor College in Zomba said the IMF disbursement will lep to ease forex woes in the country.

He said there was still need for a substantial budget support to address several other challenges the economy is facing.

“There is a requirement for more funding from other development partners. We only hope that the $18 million funding nod will help unlock the other budget support taps,’ said Kalua as quoted by Daily Times.

Kalua said government should not relax on fiscal and monitary policies adherence as “the economy remains fragile”.

An independent analyst and former Economics Association of Malawi (Ecama) President Edward Chilima said expectations of IMF aid that it will spur “ the authorities to go into overdrive so that the economy can start enjoying low interest rates, stable exchange rate and declining rate of inflation.”

 

Follow and Subscribe Nyasa TV :

Please share this Article if you like Email This Post Email This Post

More From the World

Sort by:   newest | oldest | most voted
tozer tsono
Guest
Cronyism and nepotism are the two most damaging factors to sound governance. Case in point, Peter Mutharika’s failure to advise his late brother Bingu Wa Mutharika on all the wrong decisions; like unleashing security officers on unarmed civilians in the North of Malawi, the murder of Chasowa and failure to prosecute the culprits, the costly and failed attempt to prosecute Muluzi and others, the failure to substantiate assassination allegations, and so many more mad-man decisions. Of course, the K92 billion unaccounted for makes one wonder why Peter can’t just say something about the money rather than engage foreign forensic auditors.… Read more »
diego
Guest

Commendable, let sleeping dog lie, even if all roads were tarred to them no development!!

Nzathu
Guest

good news, i hope you not going to shapen your finger

chatonda
Guest

Please read Dead Aid By Dr Dambisa Moyo of Zambia, Why clapping hands as if its free money/ This money will make us dance to the IMF s tune forever. Also Read Confession of an Economic Hitman by John Perkins. You can google these books. Goodall Gondwe with his Tumbuka Respect, he nearly fell down bowing to Peter. Sorry.

Mrs SAM Dalitso
Guest

Tikhala. Iwe mfiti. Ulira suunati.APM Woyeee.
Well done APM.

tikhala
Guest

Bwana, everytime you parade in public(you and your scarecrow) always remember this : only 37% of Mlawians want you- 63% don’t want to see you.

Che Mangochi
Guest

Thanks your excellecy for uplifting us for international recognazation specially with IMF.

Imraan Sadick
Guest

Nkhani yabwino ngati iyi kusowa ma comments kodi amalawi munakhala bwanji?

Professor Graffiti
Guest

18m is too meagre to start ululations.

chabwerapyson
Guest

Comment excellent big brains are really working keep it up.

wpDiscuz

More From Nyasatimes