Gwengwe clarifies ECF stand on Malawi

Minister of Finance and Economic Affairs Sosten Gwengwe on Monday clarified the International Monetary Fund (IMF) stand on Malawi, saying Malawi is still in talks with the Fund to ensure the country secures Extended Credit Facility (ECF).

Speaking during the Government Face the Press in Lilongwe alongside four other senior Cabinet ministers, Gwengwe said Malawi and IMF Mission discussions, which started on 5 October and will run till the 17th of this month, are going on so well.

Finance and Economy Minister – Sosten Gwengwe MP

“What it means is that if you have a program there are negotiations going. This is where terms and conditions are being done and currently these discussions are going on very well,” he said.

Gwengwe refuted media reports which have purportedly misquoted IMF Managing Director Kristalina Georgieva.

One of the local papers alleges that the IMF boss insinuated  that Malawi cannot receive extra debt anymore. However, Gwengwe said this was not true.

“It is sad that while other people are busy with the mission others are busy pulling and watering the gains down,” said Gwengwe.

The Minister also refuted reports that the IMF will not provide Malawi with an Extended Credit Facility describing them as fake.

Gwengwe said the reports have been misrepresented in the local media; pointing out that this has also worried the IMF officials who are in the country on the ECF’s discussion mission.

Gwengwe said His Excellency the President Dr Lazarus McCarthy Chakwera had a successful meeting with the IMF Managing Director.

The discussions highlighted that Malawi is on the right track to qualify for the ECF and the key outcome is that the IMF delegation was in Malawi last week for further discussions.

Gwengwe said the IMF Managing Director stressed much on the need that Malawi should receive more grants because the IMF does not give grants.

Minister of Foreign Affairs Nancy Tembo said President Chakwera trip to United Nations General Assembly has more short, medium and long term gains.

Tembo said, for example the President meeting with Mr. Axel von Trotsenburg, Managing Director of the World Bank regarding the targets Malawi must attain in order to unlock the disbursement of US$1.5 billion that has been approved for projects in Malawi has more gains.

Recently, Gwengwe said the discussion with the IMF is very crucial because it encompasses the fiscal but also macroeconomic framework that the country must be following from now going into the medium term, so that the economic imbalance that the country is going through right now is corrected. It is not a simple process and it cannot happen by a flick of fingers, he said.

The minister pointed out that the shocks that the country has gone through in the past months such as food shortages and the energy crisis have greatly affected the economy by reducing the private sector’s capacity to produce and grow.

He stressed that it is therefore important to be more resilient by not having recourse to commercial borrowing externally.

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