Vice-President Saulos Chilima Wednesday had an audience with International Monetary Fund (IMF) Resident Representative Nelnan Koumtingue where the two discussed issues of national interest.
The meeting came at a time the local economy continues to wobble, affected by the worst forex shortage in recent history, which has left private sector operations heavily crippled.
The interface also came at a time Malawi is “doing everything possible” to impress the IMF Board, which is expected to scrutinise the country’s case following the Staff Level Agreement reached with the IMF Mission on September 21.
Writing on his Facebook page, Chilima said Malawi remains hopeful and focused as the country looks ahead to yielding positive results with the Bretton Woods institution.
In an interview later, Koumtingue described the meeting as a courtesy call planned “some time ago”.
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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 Extended Credit Facility (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 macro-economic 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, Malawi authorities are committed to applying fiscal discipline, containing domestic borrowing and improving public financial management.
While commending Malawi for reaching a Staff Level Agreement with the fund, 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.
Lea, however, said although a new IMF programme will provide crucial fiscal and foreign exchange support, development partner funds alone cannot 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,” he said.
