Fiscal and monetary authorities are crafting a home-grown economic programme to guide the country’s economy in the short to medium term following the lapsing of the Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF).
Malawi’s $175 million ECF programme with the IMF automatically terminated on May 14, 2025, as no review has been completed over an 18-month period.
Reserve Bank of Malawi (RBM) Governor Macdonald Mafuta Mwale confirmed the development, saying, if everything goes well, the home-grown economic programme would commence on July 1 and will be monitored every quarter with indicative but substantive targets every six months.
Mafuta Mwale was, however, quick to note that the lapsing of an ECF programme did not mean cutting ties with the IMF.
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Mafuta Mwale said in the home-grown programme, the authorities had incorporated all the traditional indicators such as accumulation of net international reserves and others and primary domestic fiscal balance.
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“But on top of these, we have indicators like level of support to private sector players in the ATM-M sectors, growth in exports and many such targets,” Mafuta Mwale said.
He observed that the programme would have targets to be achieved every step of the way to help the authorities measure progress.
“The basic reasoning is that for you to reach your desired destination, you always need targets that are monitored and clear to measure one’s performance.
“Me, for example, I would want to have targets and be accountable to the people of Malawi at all times and have the people of this country to monitor my performance. Someone once said, ‘If you don’t have targets, it’s like chasing a black cat in a dark room’. For sure that’s tough.
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“I want Malawians to monitor me and Malawian private sector [operators] and businesses to provide the resources that we need. Donors are with us to complement our own efforts and we thank them for the unwavering support,” he said.
Blantyre-based economist Marvin Banda welcomed the idea of the homegrown economic programme, describing it as a long time coming.
According to Banda, only three out of eight ECFs have ever been completed in Malawi.
“There is a reason why the completion rate is so low. The facility is punitive and suffocates growth for low-income countries. A one-size-fits-all facility is not good for a nation like Malawi. As such, it is highly commendable for the RBM to come up with a tailor-made facility to revitalise the flagging economy,” Banda said.
