Lilongwe — Malawi will finally get resources amounting to US$40 million (about K29 billion) from the International Monetary Fund (IMF) in direct budget support, Minister of Finance, Economic Planning and Development, Joseph Mwanamvekha has announced.
This will be the first time in six years after the IMF suspended support in 2013 following looting of public funds at Capital Hill dubbed cashgate.
Speaking Saturday afternoon during a media briefing at Capital Hill in Lilongwe, Mwanamvekha said the IMF Executive Board completed and approved the second and third reviews of the three-year arrangement under the Extended Credit Facility (ECF) for Malawi.
"Following this approval, the IMF will disburse resources amounting to US$40 million (approximately, K29 billion) to Malawi by the first week of December, 2019.
"This... is a clear signal by the IMF of their faith in the Government of Malawi's economic management and policies which have resulted into continued strengthening of this country's economy in the midst of negative shocks and vulnerabilities," he said.
The minister was flanked by the Reserve Bank Governor Dr Dalitso Kabambe and the Secretary to the Treasury Cliff Chiunda.
"This approval has come at a time when government and the people of Malawi are focused on a growth path to take advantage of the macroeconomic stability that continues to prevail in this country," he further said.
The visibly excited Mwanamvekha described the IMF's decision as historical and unprecedented considering what Malawi has gone through recently ranging from natural disasters to elections; all of which are heavy costing on their own.
"This money will go directly to support our Budget and will help greatly in the macroeconomic stability of the economy," Mwanamvekha said.
He hailed President Arthur Peter Mutharika "for his stewardship and visionary leadership in taking Malawi to this level of macroeconomic stability.
"Our cooperating and development partners have now trust and confidence in working with Malawi and thereby supporting its development efforts."
Mwanamvekha further said the country expects that the IMF's approval of the second and third reviews will have a strong signaling effect to other donors to resume budget support to Malawi.
On concerns about the rising debt and other negatives, he said government will continue with fiscal policy consolidation to ensure that public debt is clearly brought on a downward trajectory.
"Already, government has commenced recording positive outcomes from its domestic revenue mobilisation efforts that have seen the Malawi Revenue Authority (MRA) meeting targets," Mwanamvekha said.
On his part, Kabambe said the news is exciting for the nation as it will ensure that the country's macroeconomics are well anchored leading to a stable exchange rate and catalyse other development partners to open their taps for direct budget support and other financing.
"This will also help in job creation and assist government in making decisions for the intelligent investment in other sectors of the economy," he said.