Following the automatic termination of Malawi’s $175 million Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF) in May this year, the government has been drawing an alternative reform strategy. Beyond containing demand side pressure with the new strategy, the government is focusing on increasing productivity in a bid to contain supply side pressure. Journalist WILLIAM KUMWEMBE caught up with Secretary to the Treasury Betchani Tchereni on the essence of the policy document.
What is the government’s overall economic reform strategy post-ECF?
Following the expiry of the ECF Programme, the government’s post-ECF economic reform strategy is anchored on the Homegrown Macroeconomic Reform Programme (HMRP), which prioritises structural transformation through enhanced productivity, fiscal discipline, exchange rate management and domestic resource mobilisation. The ATM (Agriculture, Tourism, Mining and Manufacturing) Strategy forms the backbone of this approach serving as a targeted, investment-driven framework to unlock growth potential, expand exports and create jobs. Emphasis is being placed on improving macroeconomic stability, building foreign reserves and restoring investor confidence through transparent, coordinated policy measures.
The ECF programme had a signal effect, with some traditional development partners showing intent to channel resources through direct budget support; any changes?
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Yes, the ECF signaled confidence in Malawi’s reform direction and unlocked direct budget support from key partners—for instance EU [European Union], World Bank and AFDB [African Development Bank]. With the programme’s expiry, the government is continuing close engagement with the partners to sustain this confidence. The Ministry of Finance is ensuring continued fiscal prudence and transparent budget execution to preserve credibility. Furthermore, the Homegrown Reform Programme is being structured to maintain macroeconomic discipline and will serve as a credible policy anchor to sustain development partner support, even outside an IMF programme.
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What fiscal consolidation measures would be implemented post-ECF programme?
In the meantime, the government is strictly adhering to the approved budget and fiscal consolidation remains a core priority in order for the government to reduce the fiscal deficit sustainably without compromising growth enhancing spending. The government is implementing a package of measures including: Tax reforms to broaden the base and enhance revenue, continue the on-going debt restructuring negotiations to ease interest pressures and public investment reprioritisation to focus on productive sectors.
Are there further discussions in place with the IMF for a new programme?
Discussions are ongoing with the IMF to ensure an arrangement that aligns with the evolving priorities of the government’s homegrown macroeconomic framework. This arrangement would support the macroeconomic stability gains made under the ECF and provide a structured platform for further reforms.
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What interventions has the government put in place to fund enhanced production?
In order for the government to foster productivity in the current budget, key sectors, mainly the ATMM Strategy, and [other forms of] development have been allocated almost K750 billion and K578.6 billion, respectively, which will be domestically financed. Additionally, government is implementing various initiatives which will help to ease supply-side bottlenecks and moderate inflationary pressures through: Support to mega farms, agro-processing and smart irrigation systems, establishment of mining corridors and the revision of mining regulations to unlock mineral value chains, and the expansion of eco-tourism zones and digital marketing platforms for tourism.
With the ATMM strategy in place, what is the foreseen impact on growth?
The ATMM strategy is expected to accelerate gross domestic product (GDP) growth to around 6 percent annually between 2025-26 to 2029-30. Over one million jobs will be created across value chains. The mining sector’s contribution to GDP will increase from 1 percent to over 10 percent and export diversification will significantly improve the trade balance. Overall, it lays the groundwork for structural transformation [and] eventual graduation to lower middle-income status by 2030 as stipulated in Malawi 2063 First 10-Year Implementation Plan (MIP-1)
How is the ministry working on enhancing domestic resource mobilisation?
The ministry is implementing the Domestic Resource Mobilisation Strategy (2023- 28), [which is] focusing on expanding and strengthening domestic revenue collection through tax and non-tax sources while improving expenditure efficiency and governance. The government remains committed to expanding its tax base with the aim of raising the tax-to-GDP ratio while ensuring equity and compliance through measures which include: Rolling out electronic tax administration (Msonkho Online), VAT and customs reform to close loopholes and expand the base, automation of non-tax revenues in key ministries and strengthening the Malawi Revenue Authority’s enforcement and audit systems as well as engaging the informal sector through simplified taxation and outreach.
What are the prospects in the short to medium terms?
In the short term, the government is using the approved 2025-26 budget to guide its expenditure and revenue performance. Nevertheless, external and fiscal imbalances remain a concern. However, with continued policy discipline, debt restructuring and investment in productive sectors, Malawi’s medium-term outlook is cautiously optimistic. The ATM Strategy and homegrown macroeconomic framework offer a credible pathway to recovery, resilience, and inclusive growth. The Government continues to implement mega farms initiatives, irrigation farming and mining—for instance, the resumption of Kayerekera mine in Karonga.
What does the future hold?
Despite economic slowdowns, the government is at a defining moment. The expiration of the ECF programme does not mark the end of reforms; however, it marks a transition to nationally owned solutions. The government will still continue to invest in the productive sectors of the economy through the ATMM Strategy and continued collaborations with development partners so that Malawi stays on the path of inclusive and sustainable growth. The Ministry of Finance remains committed to transparent policymaking, private sector engagement and partnerships that will deliver prosperity for all Malawians.
