The International Monetary Fund has approved an arrangement for Malawi’s $150 million extended facility programme to June 30, 2016 to “provide additional time for the authorities to implement structural measures under the program.”
A statement by the global lender said IMF executive board approved the extension of US$ 146.7 million.
“The program is aimed at the achievement and maintenance of macroeconomic stability and implementation of policies and structural reforms to spur growth, diversify the economy and reduce poverty,” IMF said in a statement.
The IMF had suspended the programme following a scandal in which senior government officials siphoned millions of dollars from state coffers. Other international donors, led by Malawi’s former colonial ruler, Britain, also halted direct aid to the southern African nation over the scandal.
But in March this year, IMF announced it would resume Malawi’s extended facility programme.
IMF Mission Chief Oral Williams said Malawi had demonstrated a concerted effort to put the programme back on track, including improvements in public financial management.
Malawi has struggled to grow its economy due to declining export earnings from tobacco and in the absence of aid, which had previously accounted for 40 percent of its budget.
The IMF said it expects Malawi’s economy to grow by 3 to 4 percent this year after expanding by 3 percent in 2015.
But growth may be weather-dependent the Fund said, after an El Nino weather pattern triggered drought and heatwaves, threatening the staple maize and other crops.