World Bank to support Malawi

The World Bank says it is ready to support Malawi with packages aimed at protecting the poor from the impact of any IMF reforms undertaken in the country.

 

World Bank country director Kundhavi Kadiresan—speaking ahead of a spring meeting of the Brettonwoods institutions slated for next week in Washington DC—said at the weekend the next few weeks will be crucial for Malawi as the country strives to win back support from the IMF, the World Bank and other donors.

“It is going to be a very difficult challenge ahead for the country to get the economy back on track… On World Bank side, we want to offer 100 percent support,” said Kadiresan.

Kadiresan was speaking in Malawi’s capital Lilongwe after an audience with President Joyce Banda at her Area 12 Residence on Saturday evening. She met Banda alongside the bank’s Malawi country manager Sandra Bloemenkamp.

Kadiresan said the World Bank is ready to support some measures that government needs to take to bring the economy back on track as well as putting in place social protection mechanisms to avert the impact of any reforms on the poor.

She said apart from the social support programmes, the World Bank is also looking at supply response programmes such as agriculture and manufacturing and other mid-term plans for the country.

Derailment of the IMF’s Extended Credit Facility (ECF) has been one of the critical issues in the straining of relations between donors and the administration of the late president Bingu wa Mutharika following his insistence on not devaluing the kwacha and setting up reforms as demanded by the IMF.

The IMF, thereafter, declared the Malawi programme off-track.

An IMF programme is a decisive facility for a country to have donor support and aid.

During their discussions, Kadiresan said Banda pledged full support in terms of putting reforms that will assist the country to bring back the IMF programme as soon as possible.

“As World Bank, we will also be working with the other donors to support the new administration in the coming days,” said Kadiresan.

The country director is based in Lusaka and represents the IMF in Zambia, Zimbabwe and Malawi.

Earlier this month, an IMF mission from Washington DC advised Malawi to spend on priority areas in light of the shrinking domestic revenue and donor support.

 

FAST  FACTS

• The IMF, as part of its ECF programme with Malawi, has been demanding devaluation of the kwacha. But the late Mutharika refused, arguing doing so would hurt people, especially the poor.

·       The IMF suspended its aid programme to Malawi due to concerns over economic mismanagement and governance.