IMF offers hope for Malawi: ‘Economic performance has been favourable’

The International Monetary Fund (IMF) has given Malawi a flicker of hope for   continued Extended Credit Facility (ECF) programme, saying the recent economic performance has been favourable and the country should expect two disbursements from the funds linked to the second and third reviews.

IMF mission chief to Malawi with Minister of Finance Mwanamvekha at a joint news conference

Addressing a news conference at the end of its week-long mission to conduct discussions on the combined second and third reviews of the three-year arrangement for Malawi under ECF, the head of IMF for Malawi Pritha Mitra said the fund was pleased that performance under the programme has been “good.”

“All but one of the quantitative performance criteria (QPC) for end-June were met. The target on the primary balance which is fiscal balance that excludes interest payments was missed largely due to shortfalls in tax revenues, unexpected goods and services spending to hold elections and to support post-cyclone disaster relief, and increased domestic development spending,” Mitra said.

She asked government o enhance spending in infrastructure, health and education sectors as well as on social services.

Mitra said there is need for Malawi to find ways of improving revenue and efficiency of spending including better public investment management.

IMF mission chief for Malawi said the fund was pleased that the real gross domestic product (GDP) growth rate for the country this year will rebound to 4.5 percent, buoyed by strong performance in agriculture sector, coupled with reconstruction of infrastructure that was damaged by Cyclone Idai, especially the Southern Region earlier during the year.

The fund projects that Malawi’s real GDP growth rate will be between 6 and 7 percent in the medium to long-term.

“Over the medium term, growth could rise further to 6-7%, backed by greater access to finance, crop diversification, an improved business climate and more resilient infrastructure, including improved electricity generation,” the IMF chief said.

Minister of Finance, Economic Planning and Development, Joseph Mwanamvekha has also projected an economic growth rate of 7 percent next year.

He said government is committed to fulfil what they have agreed with IMF to continue registering growth.

“We expect that when they conclude the with the board on the matter, they should continue assisting us with resources,” he said.

Mwanamvekha said Treasury has asked IMF to increase resources allocated to Malawi.

“The IMF programme is supposed to increase our resource Basket to the tune of $112million and we have so far received $22 million,” he said.

So far, Malawi’s year-on-year inflation rate has been in single digit lane  Inflation is a macroeconomic variable, which together with interest rates and exchange rates, give indication of stability of an economy.

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braveheart
Guest

..beloved Leader APM please let’s make sure we keep putting our house in order. These loan shanks in the name of IMF and World bank we don’t need them. They R a hypocrite of highest order. It’s my prayer we get rid of them for good..this white Capital Monopoly money has and is still destroying economies in the world left and right. With new things on the table that can help develop our economy,let’s work to death now!!

DPP mbavaa associated
Guest
DPP mbavaa associated

Are these guys at IMF n world bank and other donors gone insane to give monies to this most corrupt government in the the region. Are they not aware of the rampant theft of public resources being looted on daily basis by these DPP thugs and thieves. On what grounds is IMF giving false praise to the illegitimate govt we have in place. Why are these donors putting on blind eye and deaf ears. This DPP led govt is the most corrupted govt ever to rule Malawi and this is common sense.. even a 10yr old village child will vouch… Read more »

joseph Banda
Guest
joseph Banda

INU tadzikangoimani munseu ndikumaphwanya zinthu. You have no clue how the system of IMF & World Bank works. Stop them and let you give your money to your fellow bandits.