…debt restructuring priority
…more talks October
The International Monetary Fund (IMF) will wait until October this year to see if there is any progress on agreed targets including debt restricting.
The IMF team led by Mika Saito was in Malawi from the 16th to 22nd of May but did not give any positive signals as President Lazarus Chakweras administration is set to raise the country’s debt by K500 billion for Lake Malawi.
“We had productive discussions with the authorities on Malawi’s performance under the first review of the PMB and the next steps. Performance under the PMB based on end-December 2022 targets was mixed. This partly reflects implementation challenges linked to the fact that the macroeconomic adjustment program was put in place late in the fiscal year. It was thus difficult to reverse course on government spending, and in turn, money growth and foreign exchange reserve accumulation,” said Saito in a statement.
She said Malawi had shown committiment to taking the necessary steps to deliver on the agreed program targets and objectives, including through strong corrective actions.
“Meanwhile, the authorities continue to work closely with their debt advisors to achieve tangible and expedited progress on their debt restructuring process in line with their published strategy that underpinned the PMB request,” she revealed making debt restructing one of the key issues under consideration.
Attorney General Thabo Chakaka Nyirenda is in courts trying to ensure more borrowing by Goverment of up to K105 billion from National Bank and NBS Bank which is likely to stop Malawis chances of having a programme with the IMF.
“Virtual discussions will continue to pin down modifications of the program targets to reflect negative shocks from Cyclone Freddy, which hit Malawi in March causing loss of lives, displacement of families and destruction of infrastructure and crops,” she added.
The staff team met with His Excellency President Lazarus Chakwera, Minister of Finance and Economic Affairs, Hon. Sosten Gwengwe, Reserve Bank of Malawi Governor, Dr. Wilson Banda, and other senior government officials. The team also engaged with the Public Accounts Parliamentary Committee, civil society organizations, and development partners.