IMF unmoved by Bingu’s remarks
The International Monetary Fund (IMF) says it will continue negotiating with the Malawi Government to make sure that the country’s derailed Extended Credit Facility (ECF) gets back on track despite an outburst from President Bingu wa Mutharika.
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Speaking when he elevated Traditional Authority Makwangwala to Senior Chief in Ntcheu recently, the Malawi leader blamed the Fund for demanding the devaluation of the kwacha.
Mutharika reiterated that the move would negatively affect poor people in the villages and challenged that he cannot devalue the kwacha.
He urged members of his economic team not to protect IMF, but instead protect the local people. He challenged those officials who are not ready to protect the local people to step down.
Asked to comment on whether Mutharika’s remarks would not destabilise current negotiations between the Fund and the Malawi Government, IMF resident representative Ruby Randall said her organisation will keep talking to government.
“We continue to maintain an ongoing dialogue with the authorities, and so it has been decided that we will not be commenting at this time.
“However, we will try to keep you posted should there be any further developments,†said Randall.
The IMF in June 2011 declared its programme with Malawi “off-track†as the government had failed to meet some critical parameters in the $79.4-million credit facility meant to cushion the chronic foreign exchange shortages.
Late last year, the Malawi Government engaged the IMF to assist it to get the programme back on track.
Zodiak online last week reported that IMF wants the Malawi kwacha to be devalued to between K230 and K250 to the dollar if the bedridden economy is to be resuscitated.
Banks are selling the kwacha at around K167 per dollar, but the green buck is hovering around K250 on the parallel market.
According to Zodiak, an IMF report in its possession suggests that putting the official rate at the black market level would push the unaccounted for forex on the parallel market into the formal market.
