Tuesday, May 21, 2024

IMF agrees to support Malawi with emergency credit

Taurai Banda - Finance Ministry spokesman


The International Monetary Fund (IMF) has nodded to a request by the government of Malawi for a Rapid Credit Facility (RPF) meant to cushion the country of its economic shocks in the short term.

Finance ministry spokesman Taurai Banda confirmed the development on Tuesday with the media, and said comprehensive details will be made public “in an official statement that is currently being formulated.”

Over a week ago, IMF was in the country following a request for a disbursement under the Rapid Credit Facility (RCF)-Food Shock Window and for an IMF Staff Monitored Program with Board Involvement (PMB).

According to the IMF, Malawi requested a Fund-supported program to help address Malawi’s urgent Balance of Payments (BOP) financing needs and restore macroeconomic stability and set the foundation for inclusive growth that would improve the life of the Malawian people.

Reads in part a report by the IMF: “The authorities have embarked on a debt restructuring process to help restore debt sustainability and pave the way for an Extended Credit Facility Arrangement (ECF).

“In the interim, the authorities have requested a disbursement under the IMF Rapid Credit Facility-Food Shock Window and a Staff Monitored Program with Executive Board Involvement.

“This will help address Malawi’s immediate financing needs and support its reform program while the authorities continue to make progress on debt restructuring.”

Finance Minister Sosten Gwengwe was upbeat Malawi would get half of the US$350 million it had applied for under the Extended Credit Facility (ECF).

“This facility will help us immediately deal with some challenges, such as lack of forex,” Gwengwe said.

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