International Monetary Fund (IMF) has warned that Malawi risks a “deeper disruption to economic activity” due to the effects of coronavirus (Covid-19).
In a statement at the end of an IMF staff visit, Mission Chief for Malawi Pritha Mitra while commending authorities for regaining control over budget in the first half of the 2019/20 financial year, noted that maintaining this performance for the second half of the fiscal year will be challenging due to pressures emanating from Covid-19 as well as political pressures ahead of the fresh election, all of which it says will weigh in on government revenue.
“With the evolution of the Covid-19 outbreak still largely unknown, the economic outlook is subject to substantial uncertainty,” IMF said t in a statement issued Tuesday evening.
There has not been any confirmed Covid-19 case in Malawi so far. Despite this President Peter Mutharika declared coronavirus a national disaster as a measure to prevent cases of the virus in the country.
At the moment, all schools, colleges, both private and public universities have been closed since Monday and government is restricting public gatherings to less than 100 people.
With most African countries affected by Covid-19, including South Africa which now has the highest number infection cases in Africa and growing rapidly, there are fears the virus will easily find its way into Malawi. This is a very real possibility because of the high number of Malawians who live and work in the economic giant for the continent.
The IMF mission in the country was held between March 10 and 23, 2020 to conduct a fourth review of its three-year Extende Credit Facility (ECF).
Mitra said the IMF mission and the Malawi authorities had “productive” discussions on the fourth review under the ECF arrangement.
“These discussions will continue in the weeks ahead as the impact of the Covid-19 outbreak on Malawi become clearer,” she said.
IMF team held meetings with Minister of Finance Joseph Mwanamvekha, Governor of the Reserve Bank of Malawi (RBM) Dalitso Kabambe, other senior government and RBM officials, a broad range of national stakeholders outside government, as well as representatives of Malawi’s development partners.