Wednesday, April 24, 2024

Malawi leader Chakwera to meet Deputy IMF Director Gopinath

Malawi’s President, Dr. Lazarus Chakwera, is scheduled to meet with Ms. Gita Gopinath, the Deputy Director of the International Monetary Fund (IMF) today. According to an official statement from the State House, the two will engage in discussions on a range of topics at Kamuzu Palace later today.

“Ms. Gita comes to Malawi to appreciate first-hand the challenges facing the economy in the face of recent external shocks, as well as to hear directly from His Excellency about Malawi’s development priorities and reform programme that require support from the IMF.

“She will also hold discussions with officials from the Ministry of Finance and Economic Affairs and the Reserve Bank of Malawi on the Extended Credit Facility Programme. His Excellency warmly welcomes Ms. Gita’s visit to Malawi and the IMF’s commitment to Malawi’s economic progress that this high-level visit represents,” reads the statement.

The recent IMF Board meeting held in Washington, D.C., gave its approval to Malawi’s First Review under the Staff Monitored Program with Executive Board involvement, a program that was initiated last November.

This approval comes after an IMF Mission Team’s visit to Malawi from May 16 to 22 this year. The team assessed Malawi’s performance under the program, based on the targets set for the end of December 2022, and their evaluation indicated mixed results.

Finance Minister Sosten Gwengwe mentioned that Malawi is now awaiting a second assessment by the IMF in September. This assessment will determine whether the country is prepared for an Extended Credit Facility program with the IMF.

During discussions, the Executive Board of the International Monetary Fund (IMF) acknowledged that Malawi has faced several challenges, including a cholera outbreak and Cyclone Freddy, resulting in significant loss of life and damage to infrastructure since the approval of the Staff Monitored Program on November 11, 2022.

In this context, Malawi’s economic growth has been weaker, and inflation has been higher than initially anticipated. Moreover, the fiscal deficit for the fiscal year 2022/23 (April/March) exceeded expectations at the time the program was approved. Additionally, the country has experienced external pressures, such as a shortage of foreign exchange, difficulties in securing trade credit, and a widening gap between official and bureau exchange rates.


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