Friday, January 22, 2021
  • About Us
  • ImagiNATION
  • Adverts
  • Rate Card
  • Contact Us
The Nation Online
  • Home
  • News
  • Politics
  • Business
  • Entertainment
  • Life & Style
    • Every Woman
      • Soul
      • Family
    • Religion
    • Feature
  • Society
  • Opinion
  • Sports
  • Chichewa
  • Enation
No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Entertainment
  • Life & Style
    • Every Woman
      • Soul
      • Family
    • Religion
    • Feature
  • Society
  • Opinion
  • Sports
  • Chichewa
  • Enation
No Result
View All Result
No Result
View All Result
Home Business Business News

Treasury explains IMF ecf cancellation

by Nation Online
15/09/2020
in Business News
3 min read
0
Share on FacebookShare on TwitterShare on WhatsAppShare on LinkedinLinkedinShare via Email

Ministry of Finance says it mutually agreed with the International Monetary Fund (IMF) to cancel the three-year Extended Credit Facility (ECF) programme following a change of policy by the new government.

Minister of Finance Felix Mlusu announced the cancellation of the three-year $107.7 million (about K80 billion) ECF arrangement approved on April 30 2018. The programme amount is equivalent to 56.25 percent of Malawi’s quota in the IMF to support the country’s economic and financial reforms.

RelatedHeadlines

Food imports doubled in 20 years—report

Malawi loses 5% of GDP on donor withdrawal

Inequality within and poverty reduction

In a written response yesterday,  Ministry of F inance spokesperson Williams Banda said when government agrees on programme parameters with the   global lender, they have to be adhered to for the duration of the programme. 

Felix Mlusu | The Nation Online
Mlusu: Policy change necessitated the move

For example, he said the government emphasised on the policy change on subsidy programme, whose allocation increased from around K40 billion in the previous budget to K160 billion in the proposed 2020/21 National Budget.

Said Banda: “Policy changes were inevitable with the change of government as focus differs.

“There are no any risks in cancelling the ECF because it has given the new government a chance to renegotiate the programme in line with its policies.” 

He said the IMF agreed with government’s proposal to have a second Rapid Credit Facility (RCF) in the interim, which combines budget support and balance of payment support.

RCF is a fast-disbursing instrument amounting to $100 million (about K75 billion).

Banda said government will soon commence negotiating for a new facility.

The IMF country office was yet to respond to our questions.

On Friday, Mlusu announced the cancellation of the ECF programme when he presented the  proposed K2.2 trillion 2020/21 National Budget in Parliament in Lilongwe, saying change of government policy necessitated the move.

Commenting on the issue, Betchani Tchereni, associate professor of economics at The Polytechnic, a constituent college of the University of Malawi, said in written response yesterday that the ECF is intended for countries whose macroeconomic environment is unstable and volatile needing some assistance for balance of payment imbalances.

He said the ECF has also become a vehicle through which countries under panic use to get foreign currency.

Said Tchereni: “The decision to cancel ECF concerns issues to do with the need to borrow sustainably for investment projects and at a cheaper price.

“Therefore, it is better to negotiate long-term loans intended for infrastructure development.”

Centre for Research and Consultancy executive director Milward Tobias said yesterday that the ECF programme has quick repayment conditions and helps the recipient country to retire it quickly without passing repayment burden to next generations.

Meanwhile, the global lender has been disbursing funds under the RCF to help Malawi meet the urgent balance of payment needs stemming from the economic impact of Covid-19 pandemic.

Previous Post

UK professor donates to Mbayani School

Next Post

Kabaza owners tipped on attacks

Related Posts

Malawi has been importing maize over the years largely due to floods that have impacted output
Business News

Food imports doubled in 20 years—report

January 21, 2021
Mlusu: The budget is skewed
Business News

Malawi loses 5% of GDP on donor withdrawal

January 21, 2021
Poverty levels in Malawi remain high
Business News

Inequality within and poverty reduction

January 21, 2021
Next Post
Kalungu levison | The Nation Online

Kabaza owners tipped on attacks

Trending Stories

  • Escaped South African bail: Bushiris

    Bushiri says not seeking political intervention

    0 shares
    Share 0 Tweet 0
  • Malawi closes in on hefty US deal

    0 shares
    Share 0 Tweet 0
  • Vendors back on streets amid Covid-19 surge

    0 shares
    Share 0 Tweet 0
  • Tonse faulted on former presidents’ benefits

    0 shares
    Share 0 Tweet 0
  • Malawi loses 5% of GDP on donor withdrawal

    0 shares
    Share 0 Tweet 0

Opinions and Columns

Business Unpacked

Towards Malawi2063, lessons from Vision 2020

January 20, 2021
Rise and Shine

Never give up on resolutions

January 20, 2021
In pursuit of development

India’s vaccine drive

January 20, 2021
My Thought

Don’t relax, Covid-19 still here

January 17, 2021
  • Values
  • Our Philosophy
  • Editorial policy
  • Advertising Policy
  • Code of Conduct
  • Plagiarism disclaimer
  • Disclaimer
  • Privacy Policy
  • Terms of use

© 2021 Nation Publications Limited. All Rights Reserved.

No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Entertainment
  • Life & Style
    • Every Woman
      • Soul
      • Family
    • Religion
    • Feature
  • Society
  • Opinion
  • Sports
  • Chichewa
  • Enation

© 2020 Nation Publications Limited. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.