Malawians digest, welcome back  IMF loan programme

Malawians on social media are describing as the best Easter gift news that International Monetary Fund will resume Malawi’s $150 million extended facility programme which was suspended last year after a ‘cashgate’ scandal involving abuse of state money, a move that has brought donor confidence in the government management of the donor economy.

Some have even likened the death and resurrection of Jesus to the death and hopeful resurrection of the economy which had been on death bed for nearly two years now punishing ordinary Malawians with the high cost of living.

IMF officials said on Wednesday Malawi was declared back on IMF extended credit facility because of good management of domestic finance since September 2015.

The global lender’s leader which assessed Malawi, Oral Williams was all praises for Malawi at a news conference on Wednesday in Lilongwe saying the government worked hard with dedication to pit Malawi back on the International Monetary Fund (IMF) extended credit facility.

“This has come about because of the hard work and dedication by the Malawian authorities to bring back the facility back on track,” he said.

He advised the government to work on bank reconciliations and arrears, saying these are areas the government needed to work hard on these two areas.

Williams said IMF will work with the government on the 2016/17 to ensure that the government spends wirhin its limit.

He said IMF was closely monitoring the drought which has partly paralysed the economy.

Finance minister Goodall Gondwe, who faced calls for his resignation from some quarters of the society due to the ailing economy, was all smiles not because he has kept his job but has managed to fullfill President Peter Murtharika’s dream of getting back the ECF back on track.

“The IMF told us to borrow up to K56 billion in the last six month but we have just borrowed K4 billion,” said the elated Gondwe.

He said the government has managed to mop out excess liquidity in the banking industry which has drastically brought down inflation.

Goondwe said the government will keep on working hard on areas that the IMF expressed concern in a bid to improve the economy, which is, literally, on death bed and might not resurrect with Jesus as Malawians commemorate Easter, the gluesome killing of a man Christians believe is the Son of God.

“The advice we get from the IMF is very important because they provide a very valuable yardstick of how we can manage our economy and we will continue doing well especially on public finance management so that we are not off track again,” Gondwe said.

And Secretary to the Treasury Ronald Mangani said the  on accountability in public expenditure the leadership of President Mutharika was not relenting in that regard and  determined to ensure that cashgate  scandal – which led to donor countries cutting their contributions to the government  doesn’t recur.

Cashgate is the biggest financial scam in Malawi’s history where government officials allegedly exploited a loophole in a computer-based information storage system to divert up to US$250 million from government coffers.

Mangani said the government was doing a lot to safeguard public resources through the Public Finance Management Reform Programme which, among other things, increased compliance with rules and regulations.

He said among other things the government was doing in the context of the Public Finance Management Reform Programme was the requirement that controlling officers report on a monthly basis the expenditures that they had incurred and paid against the funding that would have been provided and generated.

“We monitor monthly, too, the commitments that they [controlling officers] may be making in the system and bank reconciliations are submitted every month and then payroll returns are also submitted every month. We are now at a point where, to the extent, possible controlling officers are being held accountable for every coin that is made available to them,” said Mangani.

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.

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