…K200bn spread 48 months
…debt, fiscal discipline on top
Malawi is on the edge of returning to the IMF extended credit facility programme after the two sides reached an agreement, the first in three years after President Lazarus Chakwera.
The programme worth K200bn (US$174 million) will await the IMF Board approval in November and reciept of assurances from Malawi lenders and partners.
The statement from the IMF says among other things, the programme will be anchored to develop ” inclusive and sustainable growth, addressing weaknesses in governance and institutions, and strengthening resilience to climate-related shocks.”
“Fiscal policy will aim at achieving a debt-stabilizing primary balance in the medium-term through a package of expenditure adjustment and revenue mobilization measures. The authorities are committed to applying fiscal discipline, containing domestic borrowing, and improving public financial management,” said the IMF.
It adds, “Monetary policy will remain anchored on containing money growth. It will aim to tame inflation by ensuring positive real interest rates. The banking system remains stable though exposure to government securities needs to be closely monitored.
“External sector policies will focus on rebuilding official international reserves and facilitating a market-determined exchange rate.
“The authorities are committed to ramp up their efforts to improve data quality and timely submission of the data to the IMF staff.
“Consideration by the IMF Executive Board is scheduled for mid-November 2023.
The staff team had a courtesy call with President Lazarus Chakwera and met with Minister of Finance and Economic Affairs Sosten Gwengwe, Reserve Bank of Malawi Governor, Dr. Wilson T. Banda, and other senior government officials.