Malawi could save approximately $9.8 million (about K7.2 billion) in the next six months following announcement by the International Monetary Fund (IMF) to give the country and 24 others a debt service relief in the wake of Covid-19 pandemic.
The Fund announced on Monday that Malawi is among 25 countries which have been offered a debt service by IMF to channel the money towards the fight against the pandemic.
The announcement indicated that the relief will run for six months pending renewal depending on the situation of Covid-19.
This means that Malawi’s repayment of loans and grants to IMF will be halted for the specified period.
In a response to an emailed questionnaire, the IMF Resident Representative, Farayi Gwenhamo said for Malawi, the approval will deliver immediately an initial six months for the period April 14 to October 13 2020.
“This will help Malawi to channel more of its scarce financial resources towards vital emergency medical and other relief efforts,” Gwenhamo.
She said it is expected that, pending available resources in the CCRT, future tranches will be approved by the Executive Board in six-monthly intervals up to a cap of two years.
In this regard, the total amount of pre-qualified debt service relief for Malawi covers the 24 months period from April 14, 2020 to April 13, 2022, amounting to approximately $44.9 million.
In an earlier interview, Treasury spokesperson, Ministry of Finance and Economic Development spokesperson, Davis Sado said the move will go a long in achieving the country’s plans to mitigate impact of the virus and fight the pandemic.
Other countries to have a debt relief include Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.
The CCRT can currently provide about $500 million in grant-based debt service relief, including the recent $185 million pledge by the United Kingdom and $100 million provided by Japan as immediately available resources.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
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