IMF mission in tomorrow for crucial talks
As anxiety over donor budgetary support freeze continue amid the Cashgate scandal, a team of officials from the International Monetary Fund (IMF) jet into the country tomorrow for talks with government.
Ministry of Finance and Economic Planning Spokesperson Nations Msowoya confirmed the development on Wednesday, saying the 10-day mission is crucial to the progress of the current Extended Credit Facility (ECF) with government.
“I can confirm that the mission arrives Sunday in the country. It’s a short mission so they will spend 10 days discussing with government officials the ECF Programme,” said Msowoya.
Last Friday, Finance and Economic Planning Minister Goodall Gondwe told Parliament that one of the reasons behind the delayed budget presentation—now scheduled for September—was the talks with the donors, which will signal whether the IMF programme remains on track following Cashgate and the subsequent donor pull-out.
Msowoya conceded in the interview that the talks with IMF officials are crucial for the budget formulation process.
He said most donors refer to IMF programme as condition for bilateral budgetary support but said the motivation of Lilongwe was to ensure the programme is on track for government to meet its own economic goals rather just impress the Breton woods institution team.
“Basically, we will discuss the ECF plus general macro-economic policies and these include budget formulation which is part of the process. The most crucial part is that we have a programme and we must maintain it on track; we just don’t do it for the IMF but because meeting those conditions means we are doing something good,” added Msowoya.
IMF country representative office could not immediately comment on the talks but in his address to Parliament, Gondwe warned that this year’s budget formulation is in a “problematic position” due to various reasons.
“This year, there is a need to take particular care in preparing the budget in view of a difficult and confused financial situation that confronts government. There is an accumulation of unpaid bills amounting to K158.5 billion and a domestic debt of K340 billion that has been left behind,” Gondwe said.
He said he has not given up on wooing back the majority of Western donors who are demanding tangible evidence of reforms before returning with support amounting to about 40 percent of the total National Budget.
