Malawi is expected to come under the scrutiny of the board of the International Monetary Fund (IMF) today, the Bretton Woods institution has said.
Initially the meeting was expected to be held Wednesday.
According to IMF Board calendar posted on the fund’s website, the board is expected to scrutinise Malawi’s First Review under the Staff Monitored Programme with Executive Board Involvement.
In November last year, the IMF reached a staff-level agreement with Malawi on a Rapid Credit Facility through the IMF’s Food Shock Window and Programme Monitoring with Board involvement (PMB) to help restore macroeconomic stability and provide the foundation for an inclusive economic recovery.
As part of the programme, Malawi received about $88.3 million, which was about 50 percent of IMF quota.
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The RCF was expected to help address Malawi’s urgent balance of payment needs related to the global food crisis and will support economic adjustment and structural reforms.
Between May 16 and 22 this year, an IMF Mission team held discussions with local authorities on the First Review of Malawi’s programme where they indicated that Malawi’s performance under the PMB based on end-December 2022 targets was mixed.
“This partly reflects implementation challenges linked to the fact that the macroeconomic adjustment programme was put in place late in the fiscal year.
It was thus difficult to reverse course on government spending and, in turn, money growth and foreign exchange reserve accumulation.
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“The authorities are committed to taking the necessary steps to deliver on the agreed programme targets and objectives, including through strong corrective actions.
Meanwhile, the authorities continue to work closely with their debt advisers to achieve tangible and expedited progress on their debt restructuring process in line with their published strategy that underpinned the PMB request,” IMF Mission Team Leader Mika Saito said in May.
Finance Minister Sosten Gwengwe was not immediately available for a comment yesterday.
Last month, President Lazarus Chakwera engaged Afreximbank and the Chinese Government in debt restructuring talks.
Currently, Malawi owes Afreximbank and the Trade and Development Bank (about $850 million and owes China about $222 million.
In his engagement with Afreximbank President Benedict Orama, Chakwera said the debt restructuring would be crucial in helping Malawi to secure an ECF programme with the IMF.
“Our engagement with you regularly over the past few months was, therefore, in pursuit of a debt restructuring mechanism that would allow us to fully restore debt sustainability and unlock an ECF for Malawi that would eventually yield dividends for both Malawi and the bank,” Chakwera said.
