Talks over a possible new Extended Credit Facility (ECF) programme of the International Monetary Fund (IMF) for Malawi resume next week, both the IMF and the Treasury have confirmed.
One of the conditions for a possible new programme was that the country first works out the misreported Gross Reserve Assets and Net International Reserves for 2018 to 2019, which the two entities say is being done.
Several legacy issues were to be addressed also before a new programme is structured.
Talks over a possible new ECF programme have been ongoing for the past two years after the government canceled the previous programme in June 2020.
In an interview on Thursday, IMF Country Manager Farayi Gwenhamo said the discussions had gathered momentum.
“Engagements are ongoing and there is great momentum. Treatment of the misreporting case is underway and is part of the ongoing discussions,” Gwenhamo said.
In a separate interview, Minister of Finance Sosten Gwengwe said the roadmap was determined during the meeting.
“The misreporting audit is ongoing. There are issues that must first of all be agreed upon by both sides. We hope to have a better road map next week after the meeting,” Gwengwe said.
At the end of Article IV consultation in December last year, the IMF Executive Board stressed the need for determined implementation of policy adjustments to address Malawi’s macroeconomic imbalances, restore debt sustainability, rebuild external buffers, and reduce poverty and inequality to improve social outcomes.
The fund underscored that restoring debt sustainability requires both addressing the legacy debt burden and adopting a strong fiscal adjustment program.
Last month, President Lazarus Chakwera said the IMF was satisfied with the level of commitment Malawi has demonstrated towards resolving the issues that have prevented the country from having a fresh programme with the fund.
Chakwera met with IMF Managing Director Kristalina Georgieva in the United States whom he said expressed satisfaction with how the country was addressing specific requirements for the resumption of another ECF.