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New ECF talks end April—IMF

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International Monetary Fund (IMF) Country Manager Farayi Gwenhamo has disclosed that discussions with the government on a new Extended Credit Facility (ECF) programme will commence towards the end of April.

This follows a decision by the government to cancel the programme last year on account of changes in policy.

The policy priorities in the ECF arrangement were aimed at entrenching macroeconomic stability, preserving debt sustainability and advancing governance reforms.

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In an interview Monday, Gwenhamo said both parties were working on firming up the mission dates.

“The mission will likely start end-April. Currently we are working on firming up the mission dates,” Gwenhamo said.

In a separate interview, Ministry of Finance spokesperson Williams Banda said technical discussion with the IMF had already commenced virtually.

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“We hope to conclude the discussions by end April to align with our fiscal calendar and we are doing the virtual meetings weekly,” Banda said.

Recently the two parties were holding pre-mission technical discussions to brief new Mission Chief Saito Mika on the Malawi situation.

Last year, the IMF disbursed about $192 million for emergency Covid support, $91 million in May 2020 and $101 million in early October 2020.

The first disbursement was 100 percent Balance of Payment (BoP) support and the second disbursement was 70 percent BoP support and 30 percent budget support.

According to information on the IMF website, Malawi has outstanding purchases and loans amounting to SDR (Special Drawing Right) 300.16 million (about $433.11 million) as of December 31 2020.

This is coming at a time the country’s revenue resources have been constrained, witnessed by recent figures from the Reserve Bank of Malawi, which show that domestic debt stock surged by K104.6 billion between November and December 2020 to K1.103 trillion.

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