The International Monetary Fund (IMF) has said the scope of its discussion with the government remains on interventions towards securing a new Extended Credit Facility (ECF).
IMF Resident Representative Farayi Gwenhamo Monday said the fund’s current intervention in Malawi does not include a cash package in the aftermath of Cyclone Freddy.
This follows a call to the Bretton Woods institution by Minister of Finance Sosten Gwengwe requesting assistance to Malawi.
But in an interview, Gwenhamo said the on-going discussion with the Treasury focuses on a transition from staff monitored programmes to the ECF.
“Our discussions at this stage are not pointing towards an emergency case such as the Rapid Credit Facility (RCF) because, if you remember, we disbursed almost a $100 million facility in October last year under the food shock window and then this shock came.
“Our discussions are not really pointing towards an emergency case but, rather, we are looking at a context of how we move forward to transition from the staff monitored programmes to the Extended Credit Facility. At this stage I don’t think there will be much to say about the cyclone response as such,” Gwenhamo said.
Last week, IMF Managing Director Kristalina Georgieva instructed the fund’s team to work with the Malawi Government to explore ways through which the fund could help the country following the disaster, apparently in response to Gwengwe’s call.
But Gwenhamo said the letter alluded that the office works closely with the Treasury in mapping the best way forward on continuing engagement on ECF.
Gwengwe could not pick our call for a comment before we went to press.
Malawi University of Business and Applied Sciences-based economist Betchani Tchereni said Malawi needs IMF assistance, especially for balance of payments issues.
“My hope is that the same is for a particular line of assistance and some other parts be left intact. As a multilateral and global institution, it has the mandate of assisting countries to stabilise their macroeconomic stance. Where they can’t assist by pumping especially foreign exchange, then things can be tough for Malawi,” Tchereni said.
Director of Disaster Preparedness at the Department of Disaster Management Affairs Moses Chimphepo said an assessment is being carried out to determine the extent of the damage caused by cyclone Freddy and how much Malawi may need to build back.
“We expect a comprehensive assessment report to be ready by the end of the month of April, which should indicate how much damage the Cyclone caused.
“Currently we are focused on the number of people in the camps and those that are ready to leave the camps so that we can give that something to start with as they go back to the villages,” Chimphepo said.
