IMF Executive Board Approves US$ 26.9 million for Malawi

The Executive Board of the International Monetary Fund (IMF) on June 21, 2017, enables the immediate disbursement of the equivalent of US$ 26.9 million, bringing total disbursements under the arrangement to the equivalent of  US$ 191.4 million for Malawi.

• The program is aimed at macroeconomic stability, growth, economic diversity and reduced poverty.
• Real GDP Growth is expected to pick up in 2017 due to better prospects for

  

  agricultural output.

• The macroeconomic outlook remains challenging, reflecting uncertainties related to adverse weather conditions and policy slippages.

The Executive Board completed the ninth and final review of Malawi’s economic performance under the program supported by an Extended Credit Facility (ECF) arrangement and  also approved the authorities’ request for waivers of non-observance of performance criteria related to the net domestic assets and net international reserves of the Reserve Bank of Malawi, and net domestic borrowing by the central government.

Malawi, a landlocked country in southeastern Africa, is defined by its topography of highlands split by the Great Rift Valley and enormous Lake Malawi

Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director, said Malawi’s economy has been severely hit by two consecutive years of weather-related shocks, which placed an estimated 40 percent of the population at risk of food insecurity.

“Relief efforts helped stabilize maize prices and alleviate the adverse impact of the drought on the vulnerable population. Augmentation of access under the ECF arrangement and sizable contributions from development partners enabled the authorities to address the worst humanitarian crisis in its history,” he said.

Furusawa cautioned the authorities that implementation of prudent fiscal policy is important to safeguard medium-term fiscal and debt sustainability, adding that improved revenue mobilization and expenditure efficiency will reduce aid dependency and create fiscal space for social spending in pursuit of Malawi’s sustainable development goals.