The International Monetary Fund (IMF) Executive Board has set November 15 as the date it will determine Malawi’s Extended Credit Facility (ECF) fate.
The board meeting comes after Malawi reached a Staff Level Agreement with the IMF Mission on September 21.
According to the IMF Board calendar, the IMF Executive Board will be looking at Second Review under the Staff Monitored Programme with Executive Board Involvement which the IMF Mission approved in September.
In an interview Monday, Finance Minister Simplex Chithyola Banda expressed optimism that Malawi will crack the nod of the IMF Executive Board.
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“Every Malawian of goodwill is expectant that this is a day God made for Malawians. Let us collectively hold our breath and pray to God for the better,” Chithyola Banda said.
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Speaking at the end of the IMF Mission in September, IMF Mission Chief for Malawi Mika Saito said the Staff Level Agreement for the four-year $174 million ECF Programme is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances by Malawi’s partners and creditors.
“The authorities continue to pursue good faith negotiations with commercial and official bilateral creditors and are in arrears on commercial debt while these discussions continue.
“The prospective ECF-supported programme will aim at restoring macroeconomic stability, building a foundation for inclusive and sustainable growth, addressing weaknesses in governance and institutions, and strengthening resilience to climate-related shocks,” Saito said.
She added that fiscal policy will aim at achieving a debt-stabilising primary balance in the medium-term through a package of expenditure adjustment and revenue mobilisation measures.
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According to Saito, the authorities are committed to applying fiscal discipline, containing domestic borrowing, and improving public financial management.
While commending the authorities for reaching a Staff Level Agreement with the Fund, UK’s Foreign, Commonwealth and Development Office Deputy Economist, Nick Lea, said finalising the agreed prior actions before the decision point at the IMF’s mid-November Board meeting is crucial, as is carrying out other important reforms to secure potential budget support.
Lea, however, said although a new IMF programme will provide crucial fiscal and foreign exchange support, development partner funds alone will not solve Malawi’s significant economic challenges.
“For Malawi to catalyse the growth it so desperately needs, it must attract the type of rules-based domestic and international investors who can drive export growth and export diversification within a predictable and fair business environment.
“The latter is critical to unleash the power of the private sector,” Lea said.
