“No Sneaky Loans!” – Rev. Maulidi Warns Govt After IMF Suspends $175M Credit Deal

Following the International Monetary Fund’s (IMF) suspension of Malawi’s US$175 million Extended Credit Facility (ECF), the government is being urged to resist the temptation of quietly securing high-interest loans from non-concessional international lenders.

This stern warning comes from Rev. Baxton Maulidi, Malawi’s champion for Economic Justice, Transparency & Accountability under the All Africa Conference of Churches (AACC), who said the government must not exploit the ECF suspension to pursue risky financial alternatives.

“We don’t want to hear that authorities have secretly borrowed from non-concessional banks—often with crippling interest rates—only for those funds to vanish through corruption,” Rev. Maulidi said. “Malawi must live within its means. Let’s not burden the next administration with unsustainable debt.”

He emphasized that concessional loans from the IMF come with lower interest and stricter oversight, while loans from other sources, such as China and similar financiers, tend to come at a greater long-term cost.

While acknowledging the economic hardship Malawians will face due to the suspension—including worsening forex shortages and rising commodity prices—Maulidi described it as a “blessing in disguise.”

“This is a wake-up call for bold leadership,” he said. “The President announced austerity measures last year, but they’ve largely been ignored. If government can’t curb overspending or stop corruption, even the anti-corruption fight becomes a hollow promise.”

Maulidi pointed to excessive government travel and unchecked public expenditure as major contributors to the current crisis.

“We can’t continue borrowing just to fund luxury. The ECF was meant to stabilize the economy and attract investment—not finance waste,” he added.

Sources within the IMF revealed that the suspension came after Malawi’s failure to uphold agreed conditions, particularly around austerity and anti-corruption efforts.

In response, the Ministry of Finance and Economic Affairs issued a statement expressing optimism that post-election, Malawi can regain IMF confidence. It also noted that despite a mountain of inherited debt and a series of external shocks—from COVID-19 to Cyclone Freddy and El Niño—the country remains committed to macroeconomic reforms.

The Ministry confirmed that an IMF delegation is expected in late May to assess Malawi’s economic state and discuss a future, customized support programme.

For now, Malawians are being assured that fiscal discipline measures under the Public Finance Management Act (2022) remain in effect, even as the nation navigates a financially turbulent period.

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