Barely five days after escaping the wrath of the International Monetary Fund (IMF) over Reserve Bank of Malawi (RBM)’s forex misreporting, the Bretton Woods institution board meets again today; this time, to consider Malawi’s $88.3 million Rapid Credit Facility (RCF) programme.
And Finance Minister Sosten Gwengwe has said authorities are keeping their fingers crossed.
Last month, Malawi became the first low-income country to reach a staff-level agreement to receive up to about $88.3 million (50 percent of Malawi’s IMF quota) in emergency financing through the IMF’s new Food Shock Window under the Rapid Credit Facility.
Malawi also requested Programme Monitoring with Board involvement.
The emergency financing under the new Food Shock Window is expected to help Malawi address urgent balance of payment needs related to the global food crisis.
On the other hand, Programme Monitoring with Board involvement would support the government’s economic reforms to restore macroeconomic stability and provide the foundation for an inclusive recovery.
IMF Mission leader for Malawi Mika Saito said a credible process for debt restructuring needed to be underway prior to the IMF Executive Board’s consideration of Malawi’s request.
Malawi University of Business and Applied Studies Associate Professor of Economics Betchani Tchereni Sunday expressed confidence that Malawi would crack IMF’s nod.
“The recommendations from the staff level matters most. The confidence coming from the waiver is also huge.
“I see nothing stopping the board from approving a disbursement through RCF. This one is bagged,” Tchereni said.
Speaking during the signing of a $350 million Second Compact with the Millennium Challenge Corporation, United States Secretary of State Anthony Blinken pledged the support of the US in helping Malawi get a programme with the IMF.
Last Wednesday, the IMF Board confirmed that Malawi misreported on its observance of the performance criteria on the floor on the Net International Reserves of the RBM, leading to the non-complying disbursements.