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IMF team in next week for ECF review

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By William Kumwembe:

REE— It will also reflect on lessons

An International Monetory Fund (IMF) mission team is expected in Malawi next week for the first review of the Extended Credit Facility (ECF) programme worth about K82.3 billion ($112.3 million) the fund’s executive board approved in May 2018.

IMF Resident Representative to Malawi, Jack Ree, said in a response to an emailed questionnaire that an advance team of the ECF mission would be in the country next week.

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The team, led by Pritha Mitra, would discuss its findings and way forward with local authorities the following week.

The upcoming mission would conduct the first review of the current ECF programme—which aims to entrench macroeconomic stability and foster growth through continuation of deep structural reforms.

“It is a relatively short visit and the advance team will spend the first week to compile all data and facts necessary to assess the programme performance during the first review period.

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“Then the following week will be devoted to discussion of these findings with the authorities and actions needed going forward,” Ree said.

He said, as usual, the mission would determine where Malawi stands in terms of the ECF programme, “whether it is going well, or corrective actions, and [if] more time, may be needed to have it back on the course.”

If the mission reaches an agreement with the government to complete the review, the second trench of the ECF facility of about $15 million out of the total credit line would be disbursed, subject to IMF Board’s approval, and the programme would move to the next phase.

“As said, the mission will only be able to establish essential data and facts after next week, hence it would be premature to even speculate about the outcome at this stage,” Ree said.

He was optimistic to see a continuation of recovery and stabilisation of the Malawi economy going forward.

“We also need to agree on ways to remain the course of stabilisation and reform—which can be tough— against the headwinds of the elections. So we will see although I always remain hopeful in Malawi’s economic future,” Ree said.

Malawi started its new economic adjustment and reform programme supported by IMF’s ECF in April this year.

An ECF programme is designed to provide liquidity or foreign exchange support to countries facing a balance of payment crisis or a protracted gap in its balance of payment.

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