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Rekindled hope for new IMF programme

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President Lazarus Chakwera on Monday said the International Monetary Fund (IMF) has been satisfied with the level of commitment Malawi is demonstrating towards resolving issues that have prevented the country from having the new Extended Credit Facility (ECF) programme with the fund.

Chakwera met with IMF Managing Director Kristalina Georgieva in the United States (US) whom he said expressed satisfaction with how the country was addressing specific requirements for the resumption of another ECF.

He said this at Kamuzu International Airport in Lilongwe on his return from the US where he carried out several assignments on behalf of Malawi and the 46-member group of underprivileged nations known as the Least Developed Countries (LDCs).

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“We should be able to have the same [credit facility] very soon because they are keen to see Malawi not just have a programme with them, but also improve in its economic status,” Chakwera said.

In 2020, the Malawi Government cancelled the ECF programme with the International IMF following the new administration’s decision to do so.

The cancellation of the programme in September last year meant that Malawi forfeited $70 million (about K53 billion at that time’s exchange rate).

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The then minister of Finance Felix Mlusu announced the cancellation of the programme when he presented the K2.2 trillion 2020-21 National Budget.

In September 2021, the IMF said it was still monitoring economic trends in Malawi and efforts by the government to manage fiscal imbalances before committing to another ECF programme with Malawi.

The two sides were yet to come to terms on a fresh programme for Malawi despite having talks.

Through the ECF programme, the IMF provides financial assistance to countries with protracted Balance of Payment (BoP) problems.

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

Writing on his Facebook page on Monday, Chakwera added that, as a custodian of Malawi’s chairmanship of the LDCs, in US he made a keynote speech at the 5th United Nations Conference on LDCs on March 17.

The Malawi leader appealed to the international community to support poor nations following the devastation of the Covid pandemic and natural disasters.

The Doha Programme of Action that was adopted by LDCs at the UN conference are meant to transform the economy towards self-sustained development.

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