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IMF extends Malawi loan program

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The International Monetary Fund (IMF) has approved a US$26.9 million (about K19.7 billion at current exchange rate) for Malawi after concluding ninth review of the Extended Credit Facility programme (ECF).

Mitsuhiro Furusawa: IMF deputy managing director Mitsuhiro Furusawa: IMF deputy managing director

ECF is a tool for medium-term financial support, aimed at low income member states like Malawi.

In a statement issued on Wednesday evening, IMF said the approved ECF programme was aimed at macroeconomic stability, growth, economic diversity and reduced poverty.

IMF expects Malawi’s real GDP Growth to pick up in 2017 due to better prospects for agricultural output.

However, it noted that the macroeconomic outlook remains challenging, reflecting uncertainties related to adverse weather conditions and policy slippages.

In completing the reviews, the IMF Board also approved the authorities’ request for waivers of non-observance of performance criteria related to the net domestic assets and net international reserves of the Reserve Bank of Malawi, and net domestic borrowing by the central government.

IMF Acting Chair and Deputy Managing Director, Mitsuhiro Furusawa said Malawi’s economy has been severely hit by two consecutive years of weather-related shocks, which placed an estimated 40 percent of the population at risk of food insecurity.

The approval of the credit brings total disbursements under the ECF arrangement to the equivalent of about US$191.4 million (about K140 billion), and comes almost three months after the global lender declared Malawi as being on track as far as reclaiming the economy is concerned.

And it follows the foot-steps of the World Bank which last month resumed budgetary support to the country, four years after donors pulled out their support following Cashgate scandal, a financial scandal involving looting, theft and corruption that happened at Capitol Hill, the seat of the Government of Malawi.

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