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Thursday, September 29, 2022

IMF sets conditions for resumption of aid to Malawi

Malawi wants fresh access to the International Monetary Fund’s Extended Credit Facility, or ECF, after a two-year stagnation.

In 2020, the IMF scrapped a plan for $70 million in loans to Malawi after it emerged that former President Peter Mutharika misinformed the lender about how ECF funds were being used.

Last year, investigations into the case led to the arrest of former Malawi Reserve Bank governor, Dalitso Kabamba, and former finance minister Joseph Mwanamweka.

In a statement issued on Monday at the end of a week-long mission in Malawi aimed at discussing the terms of the ECF’s resumption, the IMF said Malawi must first meet certain conditions.

Among them, the IMF asked Malawi to address the country’s volatile public debt and prepare a report on allegations that the country was misinforming about the administration of ECF funds between 2018 and 2020.

Malawi’s Finance Minister Sosten Gwangwe said at a news conference on Monday that the government had appointed a debt advisor to help address the country’s problem.

“For us to be able to do this, we needed technical expertise,” he said. “And the advice from the fund was to find a qualified debt advisor, and that is why we recruited a global sovereign advisor from France. They have been in the country since last week and they also look forward to putting together a debt strategy for us next week. One week, maximum, two weeks.”

Gwangwe said a report on alleged falsification of documents on the ECF fund is also in its final stages.

“The interim report has come but the actual report should come in the middle of this month,” he said. “Once these two documents are on the table, we will re-engage again for a staff level agreement, which will need to be taken to their board in mid-July.”

Economic experts say the ECF is now the only program that can help Malawi recover from its dire economic crisis.

“I’m quite behind the government on whether we need an ECF,” said Betchani Tchereni, lecturer in economics at Malawi’s University of Business and Applied Science. “We may have some issues, we are trying to do our best. Yes, we have some bad apples within the system that are not helping us well, but the bottom line is that we need those resources.” However, the way they are going to provide those resources to us as Malawi.”

The IMF says it will make its final decision on restarting the ECF in Malawi at its board meeting in July.

This article is republished from – Voa News – Read the – original article.

World Nation News Desk
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