Malawi’s Finance Minister Dr. Ken Lipenga has expressed hope over this week’s discussions with the International Monetary Fund (IMF) and the World Bank saying the talks will provide Malawi a fresh opportunity on how best to tackle challenges surrounding the implementation of the three year IMF supported programme, the Extended Credit Facility (ECF).
Lipenga left the country for Washington DC,USA, on Monday via Johannesburg, South Africa to attend the spring meetings of the International Monetary Fund (IMF) and the World Bank and discuss the implementation of the on-track ECF programme with the fund, among other issues.
He will head the Malawi delegation which includes Reserve Bank of Malawi (RBM) Governor Charles Chuka, Secretary to the Treasury Radson Mwadiwa and other senior government officials.
The IMF-World Bank spring meetings, to be held from April 19 to 21, will bring together thousands of government officials, the private sector, journalists, civil society representatives, and other interested observers to discuss economic and financial issues affecting the world.
“Our discussions in Washington DC will be taking place soon after the second board’s approval [of a new tranche] following the second review.That should give us some upper hand as we focus on how best to tackle lingering challenges,” Lipenga told Business News in an interview in Lilongwe on Monday.
Last week announced the release of $19.6 million (about K8 billion) to Malawi under the ECF programme and approved the completion of the second review of Malawi’s economic performance.
The release of the funds brings together total disbursement so far under the ECF arrangement to $58.7 million out of the program’s total resources amounting to $156.2 million.
This means that the country is yet to tap the remaining 62 percent of the total resources dangled by the Bretton Woods institution under its ECF arrangement depending on the country’s performance on the agreed targets in the programme.
“I remain confident that our policy mix will yield results. Despite the challenges, there have been significant gains,” added the minister.
Lipenga said Malawi will take advantage of the goodwill generated by the coming into power of President Joyce Banda to present a case of urgency on the economic needs of the country.
He said apart from the regular meeting, what would even be more important for the Malawi delegation would be the side meetings where detailed issues about Malawi will be tabled.
Malawi continues to face macroeconomic challenges including the relative scarcity of foreign exchange which has been falling below the recommended three months threshold despite earlier hopes that the devaluation of the Kwacha and the subsequent floatation would help unleash more foreign currency into the market as people who were hoarding it would be enticed to release the currency over improved exchange margins.
As a consequence, the country has seen the currency dramatically losing ground to major international currencies, selling at over K430 to a dollar in most authorized dealer banks (ADBs).
This has in turn fuelled the high cost of living through imported inflation as importers pass on their high cost of imports to consumers, whose purchasing power is already ravaged by last year’s 49 percent devaluation of the kwacha.