International Monetary Fund (IMF) Executive Board is on November 22 expected to conclude the second and third review of Malawi’s economic performance under the IMF-supported Extended Credit Facility (ECF) programme.
The meeting will decide on whether to disburse new tranches under the three-year arrangement which is worth $112.3 million (about K83.1 billion). The ECF programme is designed to enhance macroeconomic stability and foster higher, more inclusive and resilient economic growth.
In separate interviews in Washington DC on the sidelines of the 2019 Joint Annual Meetings by the both Minister of Finance, Economic Planning and Development Joseph Mwanamvekha and IMF director for Africa Department Abebe Selassie confirmed about the meeting on Malawi. IMF and the World Bank,
with IMF and World Bank
In an interview soon after meeting the IMF officials, Mwanamvekha said the discussions were a follow up to the recent meeting held in Lilongwe from 10 to17 September 2019 with a visiting IMF Mission.
He said: “I am glad to say that we have had a successful meeting with IMF and that now the ECF programme is on track. I must say that the IMF has agreed that they will be submitting to their Executive Board on the 22 November [2019] their recommendations to the Board.”
The minister said the delegation expects the meeting by the IMF Executive Board to approve the release
of more resources for Malawi comprising tranches from the second and third review to support rehabilitation and reconstruction efforts in the aftermath of Cyclone Idai and also to preserve macroeconomic stability for Malawi.
Mwanamvekha also said the Malawi delegation has appealed to the IMF Executive Board to ensure that the resources that the country taps from the Fund is “quite small” let alone unpredictable, adding that Malawi also expected more resources from the Fund for augmentation to mitigate the impact of Cyclone Idai.
“So, we are asking through our executive director that as much as the economy is doing very well, we need to consolidate the gains that have been achieved to date,” he said.
On his part, Selassie hoped that the Executive Board meeting will allow for the release of extra resources under the ECF apart from continued policy advice that the country will benefit from the Fund.
Weighing in on the same, Dumisani Mahlinza, IMF executive director for Africa Group One Constituency, expressed hope that he will get more support
from other staff members for IMF to speak positive of Malawi during the coming Executive Board meeting over Malawi.
“The expectations from the November meeting are high and am hoping that I will get the support of other members and we will have a positive outcome out of that meeting so that Malawi can get the augmented fund under the ECF,” he said.
The meeting of the IMF Executive Board follows a series of other recent meetings by the IMF team led by Pritha Mitra who is IMF Mission Chief for Malawi and Malawi Government officials whose preliminary outcome showed that Malawi’s economic performance was favourable despite the impact of the devastating Cyclone Idai which hit the country earlier this year.
But the review did not trigger any disbursement under the programme as it pended further review by the IMF team in Washington DC in the context of the IMF and World Bank annual general meetings currently underway.
Following the same mission, Malawi was assessed to have fulfilled quantitative performance criteria (QPC) for end- June under ECF despite missing the target on fiscal balance due to shortfalls in tax revenues, unexpected goods and services spending to hold the May 21 Tripartite Elections and to support post-cyclone disaster relief as well as increased domestic development spending.
During the September review,
IMF highlighted that economic growth is expected to strengthen to about 4.5 percent in 2019, supported by a rebound in agriculture in most parts of the country as well as on account of reconstruction of infrastructure that was damaged by Cyclone Idai, especially in the Southern Region.
