President Lazarus Chakwera Thursday took a swipe at the International Monetary Fund (IMF), saying its stance on ways of healing the economy through its Extended Credit Facility (ECF) programme were a means of devastating local businesses.
Malawi’s ECF programme fell through on May 14, 2025, forfeiting about $140 million of the $175 million four-year facility after just one disbursement.
According to the Breton Woods institution, “in accordance with IMF financing policies for low-income countries, the programme automatically terminated, as no review has been completed over an 18-month period”.
But speaking during the official opening of the 2025 Malawi International Trade Fair in Blantyre, Chakwera revealed that the IMF had demanded reductions in investment programmes such as the National Economic Empowerment Fund (Neef), currency devaluation and increases in electricity and fuel prices as conditions for continued financial support.
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He emphasised that accepting such conditions would have been detrimental to Malawi’s business community, particularly small-scale enterprises that are dependent on affordable electricity.
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“When the IMF loan programme told us that if we do not reduce investment in programmes like Neef, or if we do not lower our currency, or if we do not increase the price of electricity and fuel, I said, ‘stop it’.
“We cannot allow someone to come and lie and tell us that the money is intended to help business people in Malawi, because by increasing the price of electricity, you have killed our salon businesses, hairdressing businesses; all businesses that depend on electricity,” Chakwera said.
Chakwera argued that international financial partners should focus on supporting, rather than undermining, local business development and indicated that his administration would rather forgo IMF funding than accept conditions that would harm the domestic economy.
“Those who want to bring money here should help develop businesses, not kill our businesses. It is better for them to have the money so that we can find others who have ears to hear what we want,” he said.
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A publication on the IMF website indicates that ECF programme implementation faced numerous challenges and that, as such, it was not able to achieve macroeconomic stability.
“Notably, fiscal discipline has proven difficult to maintain in the current environment due to elevated spending pressures and insufficient revenue mobilisation efforts. Rebuilding international reserve buffers has been challenging with the current foreign exchange system. The external debt restructuring process—needed to restore debt sustainability—has not yet been concluded,” the article reads.
Responding to questions during the Public Affairs Committee All-inclusive Stakeholders Conference on Tuesday, Minister of Finance Simplex Chithyola Banda said the Programme had only been suspended.
“The programme has not been terminated, as some people are alleging. Officials from the IMF will be in the country on Thursday [yesterday] so that we can continue with our discussions,” Chithyola Banda said.
In an earlier interview, Economics Association of Malawi President Bertha Chikadza called for significant improvements in tax collection efficiency while simultaneously urging critical examination of government expenditure in the aftermath of the ECF cancellation.
“We need to come up with strategies for economic development that speak to the current situation. This should be seen as an opportunity, as the ECF was ultimately a loan despite its concessional nature. We need to harmonise how we spend our revenue from taxes. All stakeholders must reorganise, including political leaders, government agents and departments,” Chikadza said.
