President Lazarus Chakwera says his administration is doing everything possible to win back support from the International Monetary Fund (IMF).
In a statement last night after virtual talks with the fund, he said his administration has worked hard to clear bottlenecks that hindered progress towards a return to the Extended Credit Facility (ECF).
Since Chakwera came to power in 2020, his administration has sought a fresh start to Malawi’s relationship with the fund by negotiating a new programme it can own and consistently be on track.
The previous ECF under the Peter Mutharika administration was tainted with misreporting, including on foreign currency reserves as well as a borrow and spend approach to fiscal policy that ballooned the public debt to 56 percent of gross domestic product and piled interest payments that are not just unsustainable, but are annually taking away money from crucial sectors such as health, education, water and sanitation.
To clean up the mess, the Chakwera administration agreed to a forex audit of the Reserve Bank of Malawi, whose report Governor Wilson Banda said last week will be ready for sharing with the fund and other stakeholders by the end of May.
In pushing for the fresh programme, the President on Monday held virtual bilateral talks with IMF managing director Kristalina Georgieva during which he expressed his eagerness to meet the IMF team she is sending to visit Malawi next week.
Chakwera said he will continue to fix the broken systems at the central bank and restore a culture of transparency, professionalism, legality and discipline.
He said: “As you may recall, now that this reform programme is yielding results and restoring good faith between us and our development partners, I used my discussion with the IMF chief today [on Monday] to reiterate my commitment to do even more to ensure that any support we get for our economy’s recovery from exogenous shocks does not go to waste.”
Chakwera said his government will tighten public spending.
“This is why for the past six months, I have reduced my programme of public events by over 50 percent, prioritising those that promote development, economic activity and agricultural productivity,” he said.
Last week, the central bank governor said he was optimistic the Chakwera administration will win the fund approval for the programme, which is crucial to improving Malawians’ well-being.
An IMF mission is expected to jet into Malawi on May 23 this year for two weeks of official talks to hammer out a deal that could help unlock budgetary support, expand fiscal space and free up more resources to steer the economy towards a more sustainable growth path.