Malawi government intends to consolidate growth, harness inflation and improve the external sector to be in sync with the next Extended Credit Facility (ECF) with International Monetary Fund, Secretary to Treasury Ben Botolo has said.
IMF head of mission to Malawi Oral Williams pointed out that despite the just ended ECF broadly achieving its macroeconomic stabilisation objective, the programme fell short on growth and inclusion.
“There were a number of factors that were not favourable to the country that affected 40 percent of the population. When growth is low, the ordinary person does not benefit a lot from the economy. When inflation is high, it reduces the value of the money. So this has been one of the priorities in the arrangement,” Williams said at a stakeholder conference on the ECF in Lilongwe.
But Botolo said on Monday said the new program will also seek to address structural issues and enhance competitiveness.
“The ECF was initially a three-year programme, but it was extended because of drought and also postponed because of the discovert if Cashgate,” he said.
“This time we are putting back system together, so we don’t expect a lof disturbances unless there aftre weather- related shocks,” said Botolo.
He said government is hopeful that with the Bwanje and Shire Valley irrigation projects comping up, the Malawi economy should be in the right path.
Botolo also said the new IMF programme will be expected to support the key priority areas of the Malawi Growth and Development Strategy (MGDS111) directly or indirectly in a bid to increase economic performance and reduce poverty in the country.
In his remarks, Minister of Finance, Economic Planning and Development Goodall Gondwe said the ECF, despite taking longer than expected succeeded in stabilising the economy and the country still has scope for positive and inclusive growth.
“When they were factoring in the targets, they didn’t know we would have shortage of rainfall in two years and also did not know donors were saying goodbye to budgetary support and hence had to take longer to stabilise the economy” Gondwe said.